Treasury Securities yield to maturity: Which bonds have largest percentage increase?
All treasury securiities has a yield to maturity of 7%-- so the yield curve is flat. If the yield to maturiy on all Treasuries were to decline to 6%, which of the following bonds would have the largest percentage increase in price and why?
A. 15 year zero coupon Treasury bond.
B. 12 year Treasury bond with a 10% annual coupon.
C. 15 year Treasury bond with a 12 percent annual coupon.