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Consider two zero coupon bonds. Both have face values of $1,000. Bond A pays its face value in 3 years, and Bond B pays its
Consider two zero coupon bonds. Both have face values of $1,000. Bond A pays its face value in 3 years, and Bond B pays its face in 14 years. If interest rates change from 8% to 4.5%. What is the percentage change in the long maturity bond's price minus the percentage change in the short maturity bond's price? The percentage change in the long maturity bond's price minus the percentage change in the short maturity bond's price is %
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