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A 1 0 - year corporate bond has coupon rate equal to 5 . 5 % . This bond has a par value equal to
A year corporate bond has coupon rate equal to This bond has a par value equal to pays annual coupons on November and matures on November Because of the credit risk associated with the payments of this bond, the market is discounting its cash flows using yields that are percentage points higher than the yields required from creditriskfree government bonds. As a result, this corporate bond has a yield to maturity equal to
Using the firstorder linear approximation, what would be the percentage change in the price of this year corporate bond if its yield to maturity decreases by percentage points?
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