Which will be most sensitive to a change in interest rates

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Reference no: EM132645194

Problem 1: Which of the following bonds will be most sensitive to a change in interest rates?

Group of answer choices

Option 1: a 15-year bond with a $5,000 face value whose yield to maturity is 7.4% and coupon rate is 6.2% APR paid annually

Option 2: a ten-year bond with a $2,000 face value whose yield to maturity is 5.8% and coupon rate is 5.8% APR paid semiannually

Option 3: a 30-year bond with a $1,000 face value whose yield to maturity is 5.5% and coupon rate is 6.4% APR paid annually

Option 4: a 20-year bond with a $3,000 face value whose yield to maturity is 6.0% and coupon rate is 5.4% APR paid semiannually

Reference no: EM132645194

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