Rank the interest rate sensitivity of the following pairs of bonds a Bond A is an 8 coupon, 20 year maturity bond selling at par value Bond B is an 8 coupon, 20 year maturity bond selling below par value b Bond A is a 20 year, non callable coupon bond with a coupon rate of 8 , selling at par Bond B...

a Bond B has a higher yield to maturity than bond A since its coupon payments and ma ...

Rank the interest rate sensitivity of the following pairs of bonds. a. Bond A is an 8%

Question:

Rank the interest rate sensitivity of the following pairs of bonds.
a. Bond A is an 8% 20-year bond selling at par value. Bond B is an 8% 20-year bond selling below par value.
b. Bond A is a 20-year, non-callable bond with a rate of 8%, selling at par. Bond B is a 20-year, callable bond with a rate of 9%, also selling at par.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a... Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...