wo bonds have 5 years to maturity with face value as Rs. 100. The first bond has a coupon rate of 6 percent and the second bond has a coupon rate of 10 percent. Which of the following is true about the durations of these bonds O a. The duration of the higher-coupon bond will be lower O b. The duration of the lower-coupon bond will be lower O c. The duration of the higher-coupon bond will equal the duration of the lower-coupon bond Od. Incomplete information
wo bonds have 5 years to maturity with face value as Rs. 100. The first bond has a coupon rate of 6 percent and the second bond has a coupon rate of 10 percent. Which of the following is true about the durations of these bonds O a. The duration of the higher-coupon bond will be lower O b. The duration of the lower-coupon bond will be lower O c. The duration of the higher-coupon bond will equal the duration of the lower-coupon bond Od. Incomplete information
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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Two bonds have 5 years to maturity with face value as Rs. 100. The first bond has a coupon rate of 6 percent and the second bond has a coupon rate of 10 percent. Which of the following is true about the durations of these bonds
O a. The duration of the higher-coupon bond will be lower
O b. The duration of the lower-coupon bond will be lower
O c. The duration of the higher-coupon bond will equal the duration of the lower-coupon bond
Od. Incomplete information
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