Author Question: Which bond has the greatest interest rate price risk? (Read 36 times)

jojoperlo_ · **on:** Aug 7, 2023

Question 1

What is the semiannual coupon payment for a 14% bond with a $1,000 par?

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$1,400

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$700

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$140

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$70

Question 2

Which bond has the greatest interest rate price risk?

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a 20-year, $1,000 face value, zero coupon bond

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a 20-year, $1,000 face value, 14% coupon bond with annual interest payments

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a 20-year, $1,000 face value, 14% coupon bond with semiannual interest payments

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All 20-year bonds have the same interest rate price risk due to the same maturity.

jamezpowell · **Reply #1 on:** Aug 7, 2023

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