Which bond is most exposed to reinvestment rate risk

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Reference no: EM131867827

1. Which bond is most exposed to reinvestment rate risk?

An 8-year bond with a 9% coupon.

A 2-year bond with a 15% coupon.

A 3-year bond with a 10% coupon.

A 10-year zero coupon bond.

A 10-year bond with a 10% coupon.

2. The net asset value of shares in a closed-end nvestment company is $36. An investor buys the shares for $34 in the secondary market. The company distributes $1 and after one year, the net asset rises to $42. The investor sells the shares for $44 in the secondary market. What is the discount?

a) 4.7%

b) 5.9%

c) 6.3%

d) 7.5%

Reference no: EM131867827

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