Asked Sep 20, 2019
Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by 1%?
1. 10-year, zero coupon bond.
2. 1-year, 10% coupon bond.
3. 20-year, 5% coupon bond.
4. 20-year, zero coupon bond.
5. 20-year, 10% coupon bond.

Expert Answer

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Bonds: The bond refers to a long-term liability for which the compensation in the form of...

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