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Consider the following bonds: -Bond A: A 2-year zero-coupon bond with a face value of $100 and 6% YTM. -Bond B: A 2-year par-value bond
Consider the following bonds: -Bond A: A 2-year zero-coupon bond with a face value of $100 and 6% YTM. -Bond B: A 2-year par-value bond with a face value of $100 and 6% coupon rate. -Bond C: A 2-year par-value bond with a face value of $100 and 7% coupon rate. Suppose the yield curve shifts upwards by one percent. Which bond among bonds A, B, and C will experience the largest percentage price change? Which will have the lowest percentage price change? a. Bond A; Bond C b. Bond A; Bond B C. Bond B; Bond C d. Bond C; Bond B
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