Which of the following bonds will have the greatest percentage increase in value if all interest rates decrease by 1 percent?
a. 20-year, zero coupon bond.
b. 10-year, zero coupon bond.
c. 20-year, 10 percent coupon bond.
d. 20-year, 5 percent coupon bond.
e. 1-year, 10 percent coupon bond.
Answer: A
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