Multiple Choice
All treasury securities have a yield to maturity of 7 percent--so the yield curve is flat. If the yield to maturity on all Treasuries were to decline to 6 percent, which of the following bonds would have the largest percentage increase in price?
A) 15-year zero coupon Treasury bond.
B) 12-year Treasury bond with a 10 percent annual coupon.
C) 15-year Treasury bond with a 12 percent annual coupon.
D) 2-year zero coupon Treasury bond.
E) 2-year Treasury bond with a 15 percent annual coupon.
Correct Answer:
Verified
Correct Answer:
Verified
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