If there are two $1,000 bonds that pay semi-annual coupons, one with a 30-year maturity and the

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If there are two $1,000 bonds that pay semi-annual coupons, one with a 30-year maturity and the other with a 10-year maturity and both with a coupon rate of 10%, what will happen to their values if market interest rates fall to 8%?

A. The value of the 30-year bond will be $90.33 lower than the 10-year bond

B. The value of the 10-year bond will be $90.33 lower than the 30-year bond

C. The value of the 30-year bond will be $51.17 lower than the 10-year bond

D. The value of the 10-year bond will be $51.17 lower than the 30-year bond

E. Their values will be the same because their coupon rates are the same

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Public Finance

ISBN: 978-1111526986

2nd edition

Authors: John E. Anderson

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Posted Date: Jan 18, 2024 06:00 AM

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If there are two $1,000 bonds that pay semi-annual coupons, one with a 30-year maturity and the

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