honeycfa

Which of the following statements concerning the price volatility of bonds is most accurate?

A) Bonds with longer maturities have lower interest rate risk.

B) As the yield on callable bonds approaches the coupon rate, the bond's price will approach a "floor" value.

C) Bonds with higher coupons have lower interest rate risk.

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Bonds with higher coupons have lower interest rate risk. Note that the other statements are false. Bonds with longer maturities have higher interest rate risk. Callable bonds have a ceiling value as yields decline.