Question: Bond A and Bond B both have an yield - to - maturity of 5 % and a coupon rate of 4 % . Bond
Bond A and Bond B both have an yieldtomaturity of and a coupon rate of Bond A has a maturity of years, whereas Bond B has a maturity of years. Which of these two bonds is exposed to greater interest rate risk?
Question content area bottom
Part
A
Bond B
B
Bond A
C
Bonds don't have interest rate risk
D
They are exposed to the same interest rate risk as they have the same yieldtomaturity and coupon rate
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
