Which of the following bonds would have the largest percentage rise in valuation if interest rates fall by 1%? a. A zero-coupon bond with a maturity of 20 years. b. A zero-coupon bond with a maturity of ten years. c. 20-year bond with a ten percent coupon. d. A 20-year loan with a 5% coupon. e.g., a one-year bond with a ten percent coupon.

Which of the following bonds would have the largest percentage rise in valuation if interest rates fall by 1%? a. A zero-coupon bond with a maturity of 20 years. b. A zero-coupon bond with a maturity of ten years. c. 20-year bond with a ten percent coupon. d. A 20-year loan with a 5% coupon. e.g., a one-year bond with a ten percent coupon.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter6: Fixed-income Securities: Characteristics And Valuation

Section: Chapter Questions

Problem 4P

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