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In number 1 above, if interest rates are initially at 8 % and they increase to 8 . 5 % what is the predicted price
In number above, if interest rates are initially at and they increase to what is the predicted price change for each bond? What is the actual price change for each? What is the error in the predicted price change for each bond? Why is the error greater for one bond than the other? Do your answers differ if rates fall from to Why or why not?
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