Bond A has a duration of 14.2 and Bond B has a duration of 13.9 years. Therefore, relative to Bond B, Bond A has ________________ . A) a higher price B) a higher yield to maturity C) a longer time until maturity D) a higher price sensitivity to changes in the yield to maturity

Bond A has a duration of 14.2 and Bond B has a duration of 13.9 years. Therefore, relative to Bond B, Bond A has ________________ . A) a higher price B) a higher yield to maturity C) a longer time until maturity D) a higher price sensitivity to changes in the yield to maturity

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 3Q: The rate of return on a bond held to its maturity date is called the bonds yield to maturity. If...

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Question

Bond A has a duration of 14.2 and Bond B has a duration of 13.9 years. Therefore, relative to Bond B, Bond A has ________________ .

A) a higher price

B) a higher yield to maturity

C) a longer time until maturity

D) a higher price sensitivity to changes in the yield to maturity

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