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1. What is the price of Bond A? 2. What is the price of Bond B? 3. What is the price of bond A if

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1. What is the price of Bond A?

2. What is the price of Bond B?

3. What is the price of bond A if the yield to maturity changes to 9.4%?

4. What is the price of bond B if the ytm changes to 9.4%?

5. Which bond is more sensitive to changes in the discount rate? Will this always be the case?

Consider the following two bonds. Assume that coupon interest payments are made som annually and that par value is $1,000 for both bonds. Bond A Bond B 5 years 7.2% 25 years 7.2% Vield to Maturity (semi-annual)

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