What is about the duration and sensitivity of the bonds

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Question 1: Two bonds are comparable except that one pays a semi-annual coupon while the other pays an annual coupon. Which one of the following statements is true about the duration and sensitivity of the bonds?

Select one:

a. A bond with a semi-annual coupon payment will have a longer duration and be less sensitive to interest rates.

b. A bond with an annual coupon will have a longer duration and be more sensitive to interest rates.

c. A bond with a semi-annual coupon payment will have shorter duration and be less sensitive to interest rates.

d. A bond with an annual coupon will have shorter duration and be less sensitive to interest rates.

Reference no: EM132544933

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