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Which bonds tends to be the most interest rate sensitive

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Reference no: EM132776970

Problem 1: Which one of the following bonds tends to be the most interest rate sensitive?

A. a 20-year, zero coupon bond

B. a 20-year, 9 percent coupon bond

C. a 5-year, zero coupon bond

D. a 1-year, zero coupon bond

E. a 1-year, 9 percent coupon bond

Problem 2: A 6.5 percent bond has a yield to maturity of 7.25 percent, 12 years to maturity, a face value of $1,000, and pays interest annually. What is the amount of each coupon payment?

A. $65.00

B. $68.23

C. $69.10

D. $72.50

E. $77.00

Reference no: EM132776970

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