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1. Consider the following bonds with face values of $1,000. The coupon bonds make semi-annual coupon payments. Issuer Settlement 1/1/15 1/1/15 1/1/15 Maturity 1/1/17 1/1/17

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1. Consider the following bonds with face values of $1,000. The coupon bonds make semi-annual coupon payments. Issuer Settlement 1/1/15 1/1/15 1/1/15 Maturity 1/1/17 1/1/17 1/1/25 Coupon 2% 7% 7% Price % 98.02 120 140 Face Value 100 100 100 Semi? Yes Yes Yes B a. Calculate the yield to maturity, duration (in years), and modified duration (in semi-annual periods) for each bond. b. Compare A and B (same years to maturity). Consider a rise in semi-annual yields of 0.1%. Which one suffers greater capital loss? c. Compare B and C (same coupon rates). Conside a rise in semi-annual yields of 0.1%. Which on suffers greater capital loss

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