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1. Explain the relationship between a bond's fixed coupon rate and its yield to maturity. (2 marks) 2. An 8 year bond has a yield

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1. Explain the relationship between a bond's fixed coupon rate and its yield to maturity. (2 marks) 2. An 8 year bond has a yield to maturity of 6%. Which would result in the smallest % change in the bond's price, a rise to 7% or a fall to 5%? Why? (2 marks)

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