Greater interest rate risk
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Which has greater interest rate risk, a newly issued 10-year bond with a coupon rate of 6% or a newly issued 5-year bond with a coupon rate of 4%? Both bonds have the same yield to maturity.
a) the 10-year, 6% coupon bond
b) the 5-year, 4% coupon bond
c) both bonds have the same level of interest rate risk
d) there is not sufficient information to answer this question
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The response describes the greater interest rate risk.
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Which has greater interest rate risk, a newly issued 10-year bond with a coupon rate of 6% or a newly issued 5-year bond with a coupon rate of 4%? Both bonds have the same yield to ...
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