F3 Rank the interest sensitivity of the following from most sensitive (toan interest rate change) to the least sensitive.I. 8-year bond with 8.9% coupon rate (payable annually) and YTM= 3% EAR.%3DII. 7-year bond with 8.9% coupon rate (payable semi-annually) andYTM = 3% EAR.III. 7-yer bond with 8.8% coupon rate (payable daily) and YTM =3% EAR.O a. II, I, IIO b. I, II, IIO c. I, II, IO d. II, III, Ie.III, II, I

A bond's interest rate sensitivity increases with the increase in time period. A bond's interest…

Answered: Rank the interest sensitivity of the…

Rank the interest sensitivity of the following from most sensitive (to an interest rate change) to the least sensitive. 8-vear bond with 8.9% חו וחי to (nounh

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Rank the interest sensitivity of the following from most sensitive (to
an interest rate change) to the least sensitive.
I. 8-year bond with 8.9% coupon rate (payable annually) and YTM
= 3% EAR.
%3D
II. 7-year bond with 8.9% coupon rate (payable semi-annually) and
YTM = 3% EAR.
III. 7-yer bond with 8.8% coupon rate (payable daily) and YTM =
3% EAR.
O a. II, I, II
O b. I, II, II
O c. I, II, I
O d. II, III, I
e.
III, II, I

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