Consider three bonds with identical credit ratings and 8.00%…
Consider three bonds with identical credit ratings and 8.00% coupon rates, all making annual coupon payments and all selling at a face value of $1,000. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity of 8 years, and the long-term bond has maturity of 30 years. Which bond’s price would you expect to be most affected by a fall in interest rates?