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Treasury Securities yield to maturity bonds

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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.

D. 2 year zero coupon Treasury bond.

E. 2 year Treasury bond with a 15% annual coupon.

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C. 15 year Treasury bond with a 12 percent annual ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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