Which of the following would generally be considered price sensitive?
A) Fed funds purchased
B) Fed funds sold
C) Repurchase agreements
D) Demand deposits
E) A 20-year zero coupon bond

Question

Quizplus · Accepted Answer

A 20-year zero coupon bond is generally considered price sensitive because its value is highly susceptible to changes in interest rates. Unlike instruments that involve short-term borrowing or lending (such as Fed funds purchased, Fed funds sold, and repurchase agreements) or demand deposits which do not have a maturity date, the value of a long-term bond like a zero coupon bond fluctuates significantly with interest rate movements.

Which of the Following Would Generally Be Considered Price Sensitive