SOLUTION: Please help with this trick question: Which of the following has the highest interest rate risk? A. A 20-year U.S. Treasury Bond B. Bendix Corporation's month commercial paper

Question 181191This question is from textbook Foundations of Finance
: Please help with this trick question:
Which of the following has the highest interest rate risk?
A. A 20-year U.S. Treasury Bond
B. Bendix Corporation's month commercial paper
C. A six month money market certificate at a federally insured bank
D. A Southwest Airlines bond maturing in 4 years
I dont think its A nor D, its B and C that have me stumped This question is from textbook Foundations of Finance

Answer by Mathtut(3670) (Show Source): You can put this solution on YOUR website!
Actually A and C are relatively safe....hardly risky at all
:
so its between B and D imo. Bendix is Highly diversified company whereas Southwest airlines is not. So I believe D is the highest interest rate risk investment.
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