Given relatively stable financial market conditions, determine which one of the followingbonds would exhibit the least price volatility? Briefly, explain why?a. 15-year,15% coupon bondb. 5-year, 10% coupon bondc. 15-year, 10% coupon bondd. 5-year, 15% coupon bond
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Given relatively stable financial market conditions, determine which one of the following
bonds would exhibit the least price volatility? Briefly, explain why?
a. 15-year,15% coupon bond
b. 5-year, 10% coupon bond
c. 15-year, 10% coupon bond
d. 5-year, 15% coupon bond
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