If George has an investment horizon of 5 years, which of the 2 bonds below would be best for him to immunize his investment from interest rate risk (holding other factors constant) ?
Bond 1: Zero Coupon Bond with 5 years to maturity
Bond 2: Coupon Bond with 5 years to maturity
A) Neither bond
B) Coupon bond
C) Zero coupon bond
Correct Answer:
Verified
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