Question: Consider again the two bonds in Question. If the investment goal is to leave the assets untouched until maturity, such as for a childs education
Consider again the two bonds in Question. If the investment goal is to leave the assets untouched until maturity, such as for a child’s education or for one’s retirement, which of the two bonds has more interest rate risk? What is the source of this risk?
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In this case the couponpaying bond has more interest rate risk The zerocoupon bond will generate ex... View full answer
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