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Chapter 3 Introduction to Fixed-Income Valuation 145 The fol lowing information relates to Questions 11 and 12 Bond Coupon Rate 6% 6% 8% Maturity (years)

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Chapter 3 Introduction to Fixed-Income Valuation 145 The fol lowing information relates to Questions 11 and 12 Bond Coupon Rate 6% 6% 8% Maturity (years) 10 All three bonds are currently trading at par value. - 11. Relative to Bond C, for a 200 basis point decrease in the required rate of return, Bond IB will most likely exhibit a(n): A. equal percentage price change. B. greater percentage price change. C. smaller percentage price change. 12. Which bond will most likely experience the greatest percentage change in price if the mar ket discount rates for all three bonds increase by 100 bps? A. Bond A B. Bond B C. Bond C d with a 5% coupon rate, with interest

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