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19. Which bond is more sensitive to an interest rate change of 0.75%? Bond A: YTM = 4.00%,...

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Finance

19.

Which bond is more sensitive to an interest rate change of0.75%?

Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.
Bond B: YTM = 3.50%, maturity = 5 years, coupon = 7% or $70, parvalue = $1,000.

bond A

both are equally sensitive

bond B

cannot be determined

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Transcribed Image Text

19.Which bond is more sensitive to an interest rate change of0.75%?Bond A: YTM = 4.00%, maturity = 8 years, coupon = 6% or $60, parvalue = $1,000.Bond B: YTM = 3.50%, maturity = 5 years, coupon = 7% or $70, parvalue = $1,000.bond Aboth are equally sensitivebond Bcannot be determined

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