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Consider two bonds: Bond A: 10 years to maturity; FV = 1,000; Coupon rate = 6% (annual) Bond B: 20 years to maturity; FV =
Consider two bonds:
Bond A: 10 years to maturity; FV = 1,000; Coupon rate = 6% (annual)
Bond B: 20 years to maturity; FV = 1,000; Coupon rate = 6% (annual)
- Assuming interest rate is 6%, calculate the price of each bond
- Make a table comparing the bond prices when the market interest rate changes from 0% to 20% at 1% increments
- Which bond is more sensitive to changes in interest rate? Explain with a graph
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Multinational financial management
Authors: Alan c. Shapiro
10th edition
9781118801161, 1118572386, 1118801164, 978-1118572382
