Each of the following bonds has a par value of $1000 and the same yield to maturity

Finance Dec 24, 2020

Each of the following bonds has a par value of $1000 and the same yield to maturity. Which one is the most sensitive to changes in the yield to maturity?

A)20 year maturity selling at $500

B)20 year maturity selling at $1200

C)5 year maturity selling at $900
D)5 year maturity selling at $1100

E)need more info to determine

Expert Solution

Each of the following bonds has a par value of $1000 and the same yield to maturity. 20 year maturity selling at $500 is the one most sensitive to changes in the yield to maturity

Option A is correct

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