Question

Bond

Price

Coupon Rate

Maturity

A

101.886         

5

2

B

100

6

2

C

97.327

5

3

A bond is trading at a premium if its:

A. Bond A.

B. Bond B.

C. Bond C.

D. A and C are correct.

Which bond is least sensitive to change in interest rate?

A. Bond A

B. Bond B.

C. Bond C.

D. They all change by the same percentage.

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