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Determine and explain which of the following bonds will have the highest interest rate risk. Assume the bonds are issued by the same entity and

Determine and explainwhich of the following bonds will have the highest interest rate risk. Assume the bonds are issued by the same entity and coupons are annual.

(4 marks)

Bond A B C

Face value 1000 1000 1000

Coupon rate 3% 8% 0

Maturity 3 years 3years 5years

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