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Compare the price sensitivity to changes in interest rates for the following bonds: a 5 - year and a 1 0 - year bond, each

Compare the price sensitivity to changes in interest rates for the following bonds: a

5 -

year and a

10 -

year bond, each with a

7 %

coupon. Both bonds currently sell at par. How much will the priceof each bond change if interest rates increase to

8 % ?

Why is there a difference in the price change?

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