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Calculate the percentage change in price on a 10 percent coupon (annual coupons), $1,000 face value 3-year bond if the discount rate rises from 5
Calculate the percentage change in price on a 10 percent coupon (annual coupons), $1,000 face value 3-year bond if the discount rate rises from 5 percent to 10 percent. Calculate the percentage change in price on a 3-year zero coupon bond, face value $1,000, for the same interest rate change. Based on your answer, which of these bonds has a higher duration.
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