You predict that interest rates are about to fall. Which bond will give you the highest capital

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You predict that interest rates are about to fall. Which bond will give you the highest capital gain?
a. Low coupon, long maturity.
b. High coupon, short maturity.
c. High coupon, long maturity.
d. Zero coupon, long maturity.

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jan 04, 2013 07:57 AM

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You predict that interest rates are about to fall. Which bond will give you the highest capital

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D Zero coupon long maturity Explanation When the interest rates are about ...View the full answer

Investments

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