Use the following information to answer the question(s)below.Consider the following four corporate bonds that have semiannual compounding:
-If the YTM of these bonds increased to 9%,which bond's price would be most sensitive to this change in YTM?
A)#1
B)#2
C)#3
D)#4

Question

Use the following information to answer the question(s)below.Consider the following four corporate bonds that have semiannual compounding: 
-If the YTM of these bonds increased to 9%,which bond's price would be most sensitive to this change in YTM?
A)#1 
B)#2 
C)#3 
D)#4

Quizplus · Accepted Answer

Bond #4 has the longest maturity and therefore has the highest duration, making it the most sensitive to changes in YTM.

Use the Following Information to Answer the Question(s)below