The longer the maturity of a bond,
A)
the less its price sensitivity.
B)
the lower its coupon rate.
C)
the less its price sensitivity and the lower its coupon rate.
D)
the greater its price sensitivity.
Question 2
A bond issued by Liberty, Inc. 10 years ago has a coupon rate of 8 and a face value of 1,000. The
bond will mature in 15 years. What is the value to an investor with a required return of 12.5?
A) 658.94 B) 750.86 C) 800 D) 701.52