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Henson Company issued the following three bonds on January 1, 2009: Bond 1 Bond 2 Bond 3 Face value CAD 150,000 CAD 150,000 CAD 150,000
Henson Company issued the following three bonds on January 1, 2009:
| Bond 1 | Bond 2 | Bond 3 | |
| Face value | CAD 150,000 | CAD 150,000 | CAD 150,000 |
| Coupon rate | 9.0% | 9.0% | 0.0% |
| Market rate | 9.0% | 9.0% | 9.0% |
| Term | 5 years | 10 years | 10 years |
Interest is payable on June 30 and December 31.
REQUIRED:
- If the market rate increased by 1.0%, which bonds price would fall by the most? Explain.
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Quantitative Finance: An Object-Oriented Approach In C++
Authors: Erik Schlogl, Dilip B. Madan
1st Edition
1584884797, 978-1584884798
