Which of the following statement regarding interest rate risk is true? A. Interest rate risk is...

Which of the following statement regarding interest rate risk is true? A. Interest rate risk is a positive relationship between bond price and interest rate. B. The longer the maturity, the lower the interest rate risk. C. The higher the coupon rate, the higher the interest rate risk. D. The higher the coupon rate, the lower the interest rate risk

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Expert Solution

D. is true, because higher the coupon lower is the duration which is a measure of interest rate risk ( nod price sensitivity to change in interest rate)

jeff jeffy answered 1 year ago

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