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Consider a 6% coupon bond that pays coupons annually and matures in 10 years. The par value is $1,000. What will be the percentage drop
Consider a 6% coupon bond that pays coupons annually and matures in 10 years. The par value is $1,000. What will be the percentage drop in price if the yield to maturity increased from 5% per annum to 6% per annum? [Hint: First compute the prices for the two levels of the yield to maturity.] Greater than 7% Between 6.5% and 7% Between 6% and 6.5% Less than 6%
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