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1. Which of the following two bonds is more price sensitive to changes in interest rates? Briefly explain why. Assuming annual compounding: 1) A bond

1. Which of the following two bonds is more price sensitive to changes in interest rates? Briefly explain why. Assuming annual compounding: 1) A bond selling at par, X, with a 5-year year to maturity and a 10% coupon rate. 2) A zero-coupon bond, Y, with a 5-year year to maturity and a 10% yield to maturity

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