Question: Ted Bear thinks that recent Federal Reserve policy is going to push interest rates up. He is considering keeping only one of the three bonds

Ted Bear thinks that recent Federal Reserve policy is going to push interest rates up. He is considering keeping only one of the three bonds in his portfolio. He knows that bond A has a duration of 5.3128, bond B has a duration of 3.2056, and bond C has the following characteristics:

Which one of the three bonds should he keep?

Par Value S1,000 Life Coupon rate 5 percent Discount rate 10 percent 4 years

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