Rreinvestment rate risk


Problem Which of the following bonds has the most interest rate risk and why? Which has the most reinvestment rate risk and why?

a) A 5-year bond with a 9% annual coupon

b) A 5-year bond with a zero coupon

c) A 10-year bond with a 9% coupon

d) A 10-year bond with a zero coupon.

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Finance Basics: Rreinvestment rate risk
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