if you are holding two identical bonds, except that one matures in 10 years and the other matures in 5 years, which bond's price will be more sensitive to interest rate risk? multiple choice question. both bonds are equally sensitive the 10-year bond the 5-year bond time to maturity does not affect interest rate risk

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01-12-2022
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if you are holding two identical bonds, except that one matures in 10 years and the other matures in 5 years, which bond's price will be more sensitive to interest rate risk? multiple choice question. both bonds are equally sensitive the 10-year bond the 5-year bond time to maturity does not affect interest rate risk

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contexto1005 contexto1005 · Answer 1 · 2022-12-06T09:29:26+01:00

Both bonds are equally sensitive the 10-year bond the 5-year bond time to maturity .An interest rate is the amount of interest that is payable each period stated as a percentage of the amount that was lent, deposited, or borrowed.

The principal amount, interest rate, frequency of compounding, and length of time the loan, deposit, or borrowing was made all contribute to the total amount of interest on a loaned or borrowed sum.An interest rate provides information on how costly borrowing is or how profitable saving is. As a result, the amount you pay for borrowing money, stated as a percentage of the total loan amount, is the interest rate if you are a borrower.The interest rate, which is the proportion of the principal amount that the lender or other financial institution charges, can be calculated using the interest rate formula.

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