Solved: Why the zero exhibits greater interest rate risk, Finance Basics

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Why the zero exhibits greater interest rate risk

Problem:

Suppose interest rates increase from 8 to 9 percent. Which bond will suffer the greater percentage decline in price: a 30 - year bond paying annual coupons of 8 percent or a 30 year-zero-coupon? Can you explain intuitively why the zero exhibits greater interest rate risk even though it has the same maturity as the coupon bond?

Please and the above questions and show and explain how one determines the answers.

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Finance Basics: Why the zero exhibits greater interest rate risk

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