Which of the following bonds has the greatest price risk?
A. A 10-year $100 annuity.
B. A 10-year, $1,000 face value, zero coupon bond.
C. A 10-year, $1,000 face value, 10% coupon bond with annual interest payments.
D. All 10-year bonds have the same price risk since they have the same maturity.
E. A 10-year, $1,000 face value, 10% coupon bond with semiannual interest payments.
Answer: B
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