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Consider three bonds with 5.8% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has
Consider three bonds with 5.8% coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has maturity 8 years, and the long-term bond has maturity 30 years. |
a. | What will be the price of each bond if their yields increase to 6.8%?(Do not round intermediate calculations. Round your answers to 2 decimal places.) |
4 Years | 8 Years | 30 Years | |
Bond price | $ | $ | $ |
b. | What will be the price of each bond if their yields decrease to 4.8%?(Do not round intermediate calculations. Round your answers to 2 decimal places.) |
4 Years | 8 Years | 30 Years | |
Bond price | $ | $ | $ |
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