Skip to content
#
Question:

Which of the following bonds is most likely to exhibit the greatest interest rate risk, assuming that the yield curve is flat?

Bond A is a 5%, 20-year bond with no embedded options.

Bond B is a 6%, 18-year bond with no embedded options.

Bond C is a 5.5%, 15-year bond with no embedded options.

A
Bond A

Explaination

Bond A will exhibit the greatest interest rate, risk assuming the yield curve is flat, because it has the lowest coupon rate and the longest term to maturity.

Take more free practice tests for other ASVAB topics with our cfa exam prep now!