its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?
A)A 1-year zero coupon bond.
B)A 1-year bond with an 8% coupon.
C)A 10-year bond with an 8% coupon.
D)A 10-year bond with a 12% coupon.
E)A 10-year zero coupon bond.

Question

Quizplus · Accepted Answer

A 10-year zero coupon bond is most sensitive to interest rate changes, as it has the longest duration among the options, leading to the largest percentage increase in value when yield to maturity declines.

Its Yield to Maturity Declined by 1%, Which of the Following