Which of the following has the least interest rate risk?
A) a six-month unsecured promissory note from International Harvester
B) an eight-year investment certificate from a federally insured bank
C) a 15-year U.S. Treasury bond
D) an AT&T bond maturing in 15 years

Question

Quizplus · Accepted Answer

A six-month unsecured promissory note from International Harvester has the least interest rate risk as it has a shorter term and is unsecured, making it less sensitive to changes in interest rates compared to the other options. The other options have longer terms and are either backed by the government or a company, making them more susceptible to changes in interest rates.

Which of the Following Has the Least Interest Rate Risk