Consider two bonds A and B, of same coupon and both with semi-annual interest payments frequency. Bond A has a maturity

Business, Finance, Economics, Accounting, Operations Management, Computer Science, Electrical Engineering, Mechanical Engineering, Civil Engineering, Chemical Engineering, Algebra, Precalculus, Statistics and Probabilty, Advanced Math, Physics, Chemistry, Biology, Nursing, Psychology, Certifications, Tests, Prep, and more.
Post Reply
answerhappygod
Site Admin
Posts: 899603
Joined: Mon Aug 02, 2021 8:13 am

Consider two bonds A and B, of same coupon and both with semi-annual interest payments frequency. Bond A has a maturity

Post by answerhappygod »

Consider two bonds A and B, of same coupon and both with
semi-annual interest payments frequency. Bond A has a maturity of 5
years while B’s is 10 years. When the market interest rates
decline?
A) The value of bonds A and B drops and the value of A drops
more than that of B
B) The value of bonds A and B drops and the value of A drops
less than that of B
C) The value of bonds A and B rises and the value of A rises
more than that of B
D) The value of bonds A and B rises and the value of A rises
less than that of B
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!
Post Reply