Question: 1 Which bond is more sensitive to interest rate changes? A bond with 1000 par, 3% coupon bond, 10 years to maturity. Or a bond

1

Which bond is more sensitive to interest rate changes? A bond with 1000 par, 3% coupon bond, 10 years to maturity.

Or a bond with 1000 par, 5% coupon bond, 10 years to maturity?

A

Bond with 1000 par, 5% coupon bond, 10 years to maturity
B

Bond with 1000 par, 3% coupon bond, 10 years to maturity
C

Not enough information to answer this question
D

Both are just as sensitive

2

Consider a bond with a 5% coupon and a YTM= 7%. This bond will sell at:

A

A discount
B

Par
C

A premium

D

Will not sell given interest rates

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