Which of the following statements is CORRECT?
A) A zero coupon bond of any maturity will have more price risk than any coupon bond,even a perpetuity.
B) If their maturities and other characteristics were the same,a 5% coupon bond would have more price risk than a 10% coupon bond.
C) A 10-year coupon bond would have more reinvestment risk than a 5-year coupon bond,but all 10-year coupon bonds have the same amount of reinvestment risk.
D) A 10-year coupon bond would have more price risk than a 5-year coupon bond,but all 10-year coupon bonds have the same amount of price risk.
E) If their maturities and other characteristics were the same,a 5% coupon bond would have less price risk than a 10% coupon bond.

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements is CORRECT?
A) A zero coupon bond of any maturity will have more price risk than any coupon bond,even a perpetuity.
B) If their maturities and other characteristics were the same,a 5% coupon bond would have more price risk than a 10% coupon bond.
C) A 10-year coupon bond would have more reinvestment risk than a 5-year coupon bond,but all 10-year coupon bonds have the same amount of reinvestment risk.
D) A 10-year coupon bond would have more price risk than a 5-year coupon bond,but all 10-year coupon bonds have the same amount of price risk.
E) If their maturities and other characteristics were the same,a 5% coupon bond would have less price risk than a 10% coupon bond.

Which of the Following Statements Is CORRECT