Rank the following bonds, from highest to lowest interest rate risk: 2-year 6 percent coupon bond, 2-year 8 percent coupon bond, 30-year 5 percent coupon bond, 30-year, zero-coupon bond.
A) 30-year, zero-coupon bond, 30-year 5 percent coupon bond, 2-year 8 percent coupon bond, 2-year 6 percent coupon bond
B) 2-year 8 percent coupon bond, 2-year 6 percent coupon bond, 30-year 5 percent coupon bond, 30-year zero-coupon bond
C) 30-year, zero-coupon bond, 30-year 5 percent coupon bond, 2-year 6 percent coupon bond, 2-year 8 percent coupon bond
D) 30-year, 5 percent coupon bond, 30-year zero-coupon bond, 2-year 8 percent coupon bond, 2-year 6 percent coupon bond
Correct Answer:
Verified
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