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Consider the following four bonds: Bond A B C D Coupon Rate 10.00% 9.00% 6.00% 0.00% Years To Maturity 9 20 15 14 Plot the

Consider the following four bonds:

Bond

A

B

C

D

Coupon Rate

10.00%

9.00%

6.00%

0.00%

Years To Maturity

9

20

15

14

Plot the price-yield relationship starting from YTM values of 0.5% to 30% in increments of 0.5%.

If the current YTM is 8% and you expect the yields to fall, which bond would you prefer and why?

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