Which set of conditions will result in a bond whose price has greatest sensitivity to changes in

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Which set of conditions will result in a bond whose price has greatest sensitivity to changes in interest rates? Explain your choice.

a. A low coupon and a short maturity.

b. A high coupon and a long maturity.

c. A low coupon and a long maturity.

d. A high coupon and a short maturity.

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Introduction To Fixed Income Analytics

ISBN: 9780470572139

2nd Edition

Authors: Steven V. Mann, Frank J. Fabozzi

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Question Posted: Apr 30, 2024 01:02 AM

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Which set of conditions will result in a bond whose price has greatest sensitivity to changes in

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Step by Step Answer:

The correct answer is c A low coupon and a long maturity The sensitivity of a bonds price to changes in interest rates is measured by a concept called ...View the full answer

Introduction To Fixed Income Analytics

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