Consider the four bonds that pay annual coupons: Bond Yrs to maturity Coupon YTM A 1 0%
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Question:
Consider the four bonds that pay annual coupons:
Bond | Yrs to maturity | Coupon | YTM |
A | 1 | 0% | 5% |
B | 5 | 6% | 7% |
C | 10 | 10% | 9% |
D | 20 | 0% | 8% |
Which of the four bonds is the most sensitive to a 1% increase in YTM? Why?
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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