If its yield to maturity declined by 1%, which of the following bonds would have the largest percentage increase in value?

Question

Quizplus · Accepted Answer

A zero coupon bond's price is more sensitive to changes in interest rates than a coupon bond, and a longer-term bond is more sensitive than a shorter-term bond. Therefore, a 10-year zero coupon bond would have the largest percentage increase in value if its yield to maturity declined by 1%.

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