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Bond A has a coupon of 5% and a maturity date of January 1, 2025. Bond B has a coupon of 3% and a maturity
Bond A has a coupon of 5% and a maturity date of January 1, 2025. Bond B has a coupon of 3% and a maturity date of January 1, 2025. How would the price changes in the two bonds compare if interest rates rise by 1%? (Assume all other factors remain unchanged).
The price of bond B will decrease by more than the price of bond A
The price change will be approximately the same amount for both bonds
The price of bond A will decrease more than the price of bond B
The price of bond A will increase by more than the price of bond B
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