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Bond Y is a 4 % coupon bond and Bond Z is a 9 % coupon bond. They both have 5 years to maturity, make

Bond Y is a

4 %

coupon bond and Bond Z is a

9 %

coupon bond.

They both have

5

years to maturity, make annual payments and have a YTM of

9 % .

If interest rates suddenly increase by

1 %,

use the bond formula to calculate the percentage change in the price of Bond Y

.

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