Question: 3. Among the four bonds listed below, which one has the least amount of interest rate risk? A. 5-year floating rate note with coupon rate

3. Among the four bonds listed below, which one has the least amount of interest rate risk?

A. 5-year floating rate note with coupon rate = 6 month LIBOR + 20bp, coupons reset every six months

B. 5-year inverse floater with coupon rate = 12% - 6 month LIBOR, coupons reset every six months

C. 5-year zero coupon bond

D. 5-year 6% coupon bond

4. A 5-year 4% Treasury Note has a yield-to-maturity of 3% and a face value of $1,000. Coupons are paid semi-annually and the first coupon will be paid in six months. The price of the T-note is _________.

A. $1,045.80

B. $1,000

C. $955.09

D. $1,046.11

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