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johnpaech johnpaech
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Posts: 1098
Rep: 7 0
6 years ago
Which of the four bonds is the most sensitive to a one percent increase in the YTM?
A) Bond A
B) Bond B
C) Bond C
D) Bond D
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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wrote...
6 years ago
D
Explanation:  D)

Bond   Years to maturity   
Coupon   
YTM   
Price0   
Price1   
% Chg   
$ Chg
A   1   0%   5%   $952.38    $943.40    -0.94%   ($8.98)
B   5   6%   7%   $959.00    $920.15    -4.05%   ($38.85)
C   10   10%   9%   $1064.18    $1000.00    -6.03%   ($64.18)
D   20   0%   8%   $214.55    $178.43    -16.83%   ($36.12)
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