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8 years An investor is considering the following six annual coupon payment government bonds: Bond Coupon Rate Time-to-Maturity Yield-to Maturity A 6% 3.50% B 6%
8 years An investor is considering the following six annual coupon payment government bonds: Bond Coupon Rate Time-to-Maturity Yield-to Maturity A 6% 3.50% B 6% 6 years 4.50% 5% 3.50% 5% 6 years 4.50% 4% 8 years 3.50% F 4% 6 years 4.50% 1. Based on the relationships between bond prices and bond characteristics, which bond will go up in price the most on a percentage basis if all yields go down by 10 basis points? Dow: 8 years 2. Based on the relationships between the bond prices and bond characteristics, which bond will go down in price the least on a percentage basis if all yields go up by 10 basis points
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