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As an analyst at bank of America Merrill Lynch, you are examining the impact of interest rate on the following bonds: Bond A. An 5-year

As an analyst at bank of America Merrill Lynch, you are examining the impact of interest rate on the following bonds: Bond A. An 5-year maturity, 0% coupon bond. Bond B. An 5-year maturity, 6% coupon bond. Bond C. A 11-year maturity, 6% coupon bond. Bond D. A 11-year maturity, 0% coupon bond.

Choose all correct answers. Please note that each incorrect answer will reduce the score by 10%.

a. If the interest rate is expected to decline significantly, all thes bonds will have the same percentage change in price.

b. If the interest rate is expected to decline significantly, bond B will have the lowest percentage change in price.

c. If the interest rate is expected to rise significantly, bond C will have the highest percentage change in price.

d. If the interest rate is expected to rise significantly, bond B will have the highest percentage change in price.

e. If the interest rate is expected to decline significantly, bond C will have the lowest percentage change in price.

f. If the interest rate is expected to decline significantly, bond D will have the lowest percentage change in price.

g. If the interest rate is expected to decline significantly, bond A will have the lowest percentage change in price.

h. If the interest rate is expected to rise significantly, bond D will have the highest percentage change in price.

i. If the interest rate is expected to rise significantly, bond A will have the highest percentage change in price.

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