Considering two different bonds in which to invest

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Reference no: EM131318776

You are considering two different bonds in which to invest. Both bonds pay interest annually. Bond A has a face value of $1,000, a coupon rate of 5%, a yield-to-maturity of 6%, and matures in five years. Bond B has a face value of $1,000, a coupon rate of 5%, a yield-to-maturity of 6%, and matures in twenty years. Which bond has more interest rate risk?

A. Bond A

B. Bond B

Reference no: EM131318776

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