The prices of ____-coupon bonds and bonds with ____ maturities are most sensitive to changes in the required rate of return.

Question

Quizplus · Accepted Answer

Low-coupon bonds and bonds with long maturities are most sensitive to changes in interest rates because there is a longer time frame for the fixed payments to be affected by changes in the market rates, and lower coupon rates mean that less of the total return is fixed, making the bond's price more volatile in response to interest rate changes.

The Prices of ____-Coupon Bonds and Bonds with ____ Maturities

The Prices of -Coupon Bonds and Bonds with Maturities