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Which of the Following Has the Greatest Price Risk

Question 45

Multiple Choice

Which of the following has the greatest price risk?


A) A 10-year, $1,000 face value, 10 percent coupon bond with semiannual interest payments.
B) A 10-year, $1,000 face value, 10 percent coupon bond with annual interest payments.
C) A 10-year, $1,000 face value, zero coupon bond.
D) A 10-year $100 annuity.
E) All of the above have the same price risk since they all mature in 10 years.

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