A Three-Year Bond with a Current Yield of 10% Per

Multiple Choice

A three-year bond with a current yield of 10% per annum and a duration of 2.76 years,when compared with a four-year bond with a current yield of 12% per annum and duration of 3.43 years,will _______ when interest rates rise.

A) have a greater fall in price
B) have a smaller fall in price
C) have the greater interest rate exposure
D) not alter in price