ACI
3I0-012 · Question #350
All other things being equal the interest rate risk of a fixed coupon bond is:
The correct answer is B. greater, the lower the coupon and the longer the term. See the full explanation below for the reasoning.
Question
All other things being equal the interest rate risk of a fixed coupon bond is:
Options
- Agreater, the higher the coupon and the longer the term
- Bgreater, the lower the coupon and the longer the term
- Clower, the lower the coupon and the shorter the term
- Dlower, the higher the coupon and the longer the term
How the community answered
(26 responses)- A12% (3)
- B77% (20)
- C4% (1)
- D8% (2)
Community Discussion
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