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Unformatted text preview: coupon rate, payable semi-annually. It is now 10 years later and the current market rate of interest is 9.00%. If interest rates remain at 9.00% until Quirk's bonds mature, what will happen to the value of the bonds over time? WRONG a. The bonds will sell at a premium and decline in value until maturity. b. The bonds will sell at a discount and rise in value until maturity. c. The bonds will sell at a premium and rise in value until maturity. d. The bonds will sell at a discount and fall in value until maturity. Which of the following bonds would have the most re-investment rate risk? a. A 10-year, 10% coupon bond. b. A 10-year, zero coupon bond. c. A 20-year, 10% coupon bond. d. A 20-year zero coupon bond....
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This note was uploaded on 05/05/2010 for the course ECONMOICS ECON 203 taught by Professor Josephpetry during the Spring '10 term at University of Illinois, Urbana Champaign.
- Spring '10