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Consider Bonds A, B, C, and D, Each with a Par

Question 22

Multiple Choice

Consider bonds A, B, C, and D, each with a par value of $1,000. Which of the following bond's price is most sensitive to market rate changes?


A) Bond A: 4 year, 7 percent coupon rate, yield 4.2 percent
B) Bond B: 5 year, 6.5 percent coupon rate, yield 4.3 percent
C) Bond C: 8 year, 6.5 percent coupon rate, yield 4.2 percent
D) Bond D: 15 year, 5 percent coupon rate, yield 4.2 percent

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