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All else the same, the price sensitivity of a larger coupon bond to change in interest rate...

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Finance

Allelse the same, the price sensitivity of a larger coupon bond tochange in interest rate is ___ that of a smaller coupon bond.
A. either greater than or the same as
B. smaller than
C. the same as
D. greater than

Answer & Explanation Solved by verified expert
4.3 Ratings (924 Votes)
Lets understand the relationship between coupon and the interest rate risk All else the same a bond with lower coupon has higher interest rate risk because in such case most of the    See Answer
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Transcribed Image Text

Allelse the same, the price sensitivity of a larger coupon bond tochange in interest rate is ___ that of a smaller coupon bond.A. either greater than or the same asB. smaller thanC. the same asD. greater than

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