One of your clients owns 2 different 6% corporate bonds maturing in 15 years. The first bond is callable in 5 years, while the second has 10 years of call protection. If interest rates begin to fall, which bond is likely to show a greater change in price?
A) Both will decrease by the same amount.
B) Bond with the 10-year call.
C) Bond with the 5-year call.
D) Both will increase by the same amount.
Answer: B) Bond with the 10-year call.