This question asks which security will fall the least in price when interest rates change.

The two contenders are a 1-year 3% TRANs and a T-bill.

The explanation confirms that lower coupons mean more price volatility, and then concludes that the T-bill will move the least because its coupon is lowest (0%). This is directly contradictory.

You are correct - this is a typo. Fixed income securities with the longest maturities and lowest coupons experience the most price volatility. Therefore, the security with the shortest maturity and the highest coupon will experience the least price volatility. The TRANs should be the right answer.

Thanks for pointing it out! We’ll have the question updated ASAP.