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9. You purchased two bonds with annual coupon payments at 8%, and par values of 1000 . Bond A has 2 years to maturity, while
9. You purchased two bonds with annual coupon payments at 8%, and par values of 1000 . Bond A has 2 years to maturity, while Bond B has 20 years to maturity. Both are currently selling for par. a. Calculate the Yield to Maturity of these bonds at the time of purchase. b. Calculate the percentage price changes for these bonds if, right after you purchase them, interest rates (YTMs) change for these bonds by 1% in either direction (up and/or down). c. What do you conclude from b. above on the sensitivity of bond prices to interest changes and its relationship to maturity
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