Zero coupon bonds have highest reinvestment rate risk

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Reference no: EM131057735

Which of the following statements is most correct?

a) All else equal, 20-year T-bonds have less price risk than 5-year T-bonds.

b) All else equal, bonds with 5% coupon rate have more reinvestment rate risk than bonds with 10% coupon rate.

c) All else equal, bonds with 5% coupon rate have less price risk than bonds with 10% coupon rate.

d) All else equal, zero coupon bonds have highest reinvestment rate risk.

e) All else equal, 20-year AAA bonds have less reinvestment rate risk than 3-year AAA bonds.

Reference no: EM131057735

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