CHAPTER 4 BOND PRICE VOLATILITY - Stanford University

There are two characteristics of an option-free bond that determine its price volatility: coupon and term to maturity. First, for a given term to maturity and initial yield, the price volatility of a bond is greater, the lower the coupon rate. This characteristic can be seen by comparing the 9%, 6%, and zero-coupon bonds with the same maturity. ................
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