Holding other factors constant, which one of the following bonds has the smallest price volatility?

A) 5-year, 0% coupon bond
B) 5-year, 12% coupon bond
C) 5 year, 14% coupon bond
D) 5-year, 10% coupon bond
E) Cannot tell from the information given

Price Volatility

The rate at which the price of a security increases or decreases for a given set of returns, often measured by the standard deviation of historical daily price changes.

Coupon Rate

The interest rate on a bond paid by the issuer, expressed as a percentage of the bond's face value.