Answered: Which one of the following bonds has…

Which one of the following bonds has the lowest interest rate risk? A. 8-year, zero coupon B. 8-year, 8% coupon C. 16-year, zero coupon D. 16-year, 8% coupon

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter5: The Cost Of Money (interest Rates)

Section: Chapter Questions

Problem 7PROB

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Question

5. Which one of the following bonds has the lowest interest rate risk?

A. 8-year, zero coupon

B. 8-year, 8% coupon

C. 16-year, zero coupon

D. 16-year, 8% coupon

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