19. Which bond is more sensitive to an interest rate change of 0.75%? Bond A: YTM = 4.00%,...

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Finance

19.
Which bond is more sensitive to an interest rate change of0.75%?

Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.
Bond B: YTM = 3.50%, maturity = 5 years, coupon = 7% or $70, parvalue = $1,000.
bond A
both are equally sensitive
bond B
cannot be determined

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19.Which bond is more sensitive to an interest rate change of0.75%?Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.Bond B: YTM = 3.50%, maturity = 5 years, coupon = 7% or $70, parvalue = $1,000.bond Aboth are equally sensitivebond Bcannot be determined

19. Which bond is more sensitive to an interest rate change of 0.75%? Bond A: YTM = 4.00%,...

80.2K

Verified Solution

Question

Finance

19.
Which bond is more sensitive to an interest rate change of0.75%?

Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.
Bond B: YTM = 3.50%, maturity = 5 years, coupon = 7% or $70, parvalue = $1,000.
bond A
both are equally sensitive
bond B
cannot be determined

Answer & Explanation Solved by verified expert

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