Which of the following statements is CORRECT? Answer All else equal, high-coupon
ID: 2675606 • Letter: W
Question
Which of the following statements is CORRECT?Answer
All else equal, high-coupon bonds have less reinvestment rate risk than low-coupon bonds.
All else equal, long-term bonds have less interest rate price risk than short-term bonds.
All else equal, low-coupon bonds have less interest rate price risk than high-coupon bonds.
All else equal, short-term bonds have less reinvestment rate risk than long-term bonds.
All else equal, long-term bonds have less reinvestment rate risk than short-term bonds.
Explanation / Answer
All else equal, long-term bonds have less reinvestment rate risk than short-term bonds.