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Consider the following three bonds: Bond Price Coupon Rate Time-to-Maturity A 96.000 8% 6 years B 98.000 9% 8 years C 105.000 9% 6 years
Consider the following three bonds:
Bond | Price | Coupon Rate | Time-to-Maturity |
A | 96.000 | 8% | 6 years |
B | 98.000 | 9% | 8 years |
C | 105.000 | 9% | 6 years |
Which bond will most likely experience the smallest percentage change in price if the market discount rate for all three bonds increases by 100 basis points? Explain your logic in 2-4 sentences. Show Calculations and Formulas of how you arrived to this answer.
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