Consider the following bonds: Bond Years till maturity Coupon % A 5 5.5 B 9 4.0 C
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Question:
Consider the following bonds:
Bond | Years till maturity | Coupon % |
A | 5 | 5.5 |
B | 9 | 4.0 |
C | 14 | 5.0 |
D | 21 | 3.5 |
Currently, the yield on similar bonds is 5.0%. If the interest rates decrease to 4.75%, which of the bonds is subject to a greater interest rate risk?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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