7. Bonds A and B both have $10,000 face values, 8% yields-to-maturity, and tenyear terms-to-maturity. However, bond

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7. Bonds A and B both have $10,000 face values, 8% yields-to-maturity, and tenyear terms-to-maturity. However, bond A has a 10% coupon rate, whereas bond B sells at par. (Both make annual interest payments.) If the yields on both bonds decline to 6%, calculate the percentage price changes of the two bonds.

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Investments

ISBN: 9788120321014

6th Edition

Authors: William F. Sharpe, Gordon J. Alexander, Jeffery V. Bailey

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