Bond Pricing
Which bond would have the GREATEST interest rate risk?
Interest rate risk is highest with longer maturities and lower coupon rates. The 20-year bond with a 4% coupon has both the longest maturity and lowest coupon, making it most sensitive to interest rate changes.
Complete Analysis & Legal Rationale
Interest rate risk is highest with longer maturities and lower coupon rates. The 20-year bond with a 4% coupon has both the longest maturity and lowest coupon, making it most sensitive to interest rate changes.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.