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Bond A has a coupon of 10% and a maturity date of October 31, 2025. Bond B has a coupon of 8% and a maturity
Bond A has a coupon of 10% and a maturity date of October 31, 2025. Bond B has a coupon of 8% and a maturity date of October 31, 2025. How would the price changes for each of the two bonds compare if interest rates fall by 1% (assuming all other factors remain constant)?
A) The price of Bond B will increase more than the price of Bond A
B) The price change will be approximately the same amount for both bonds
C) The price of Bond A will decrease more than the price of Bond B
D) The price of Bond A will increase more than the price of Bond B
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