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Bond Q is a 4 percent coupon bond. Bond R is a 6 percent coupon bond. Both bonds have 1 5 years to maturity, make
Bond Q is a percent coupon bond. Bond R is a percent coupon bond. Both bonds have years to maturity, make annual coupon payments, and have a YTM of percent. If interest rate YTM changes from percent to percent, what is the percentage price change of these bonds? What if the YTM suddenly falls from percent to percent instead? What does this problem tell you about the interest rate risk of lowercoupon bonds?
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