Question
Bond B and Bond T both have 7% coupon rate, bond B has 3 years to maturity, bond T has 20 years to maturity. What
Bond B and Bond T both have 7% coupon rate, bond B has 3 years to maturity, bond T has 20 years to maturity. What is the percentage change of in the price of each bond if interest rate goes up by 2%? What is the percentage change if interest rate goes down by 2%? Which bond has higher interest rate risk?
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Financial Management Principles And Applications
Authors: Arthur J. Keown, J. William Petty, John D. Martin, Jr. Scott, David F.
10th Edition
0131450654, 9780131450653
