Of the following bonds,which one has the highest degree of interest rate risk?

Question

Quizplus · Accepted Answer

Longer maturity bonds have a higher degree of interest rate risk as compared to shorter maturity bonds. This is because longer-term bonds are exposed to interest rate fluctuations for a longer period of time, which increases their sensitivity to changes in interest rates. Hence, the 20-year 8% bond has the highest degree of interest rate risk among the given options.

Of the Following Bonds,which One Has the Highest Degree of Interest