Question 7 (5 points) There are four bonds that only vary in time to maturity and coupon rate. If interest rate changes, which one of the following bonds will have the largest volatility in its bond price? A 10-year bond with a coupon rate of 6% A 30-year bond with a coupon rate of 8% A 10-year bond with a coupon rate of 8% A 30-year bond with a coupon rate of 6% Next Page Page 7 of 19 Previous Page Submit Quiz 4 of 19 questions saved f10 18 144 6 FC 3 f4 01 f2 8 % 8 # $ 6 4 5 @2 3 T Y U DQuestion 5 (5 points) A two-year bond has a coupon yield of 8% and a yield to maturity of 10%. The bond pays coupons annually and the face value is $1,000. What is the modified duration (volatility) for the bond? 1.95% 1.25% 1.75% 2.50% Page 5 of 19 Previous Page Next Page Submit Quiz 4 of 19 questions saved hp 10 19 DII DDI f8 f6 $7 2 3 10 f1 % & 8 9 # $ @ 2 3 4 5 6 O P Q W E R T Y U S G H C K A D F