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It belongs To Financial Economics. Please just give answers with simple explanation. We know that the price of a zero-coupon bond is calculated by F

It belongs To Financial Economics. Please just give answers with simple explanation. We know that the price of a zero-coupon bond is calculated by

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F P: [1+RJI (l) where P is the market price of the bond, F is the face value, R is annual percentage rate {APR}, and t is the number of years to maturity. Prove the inverse relationship between the bond price and the interest rate. (Hint: Use the rst order derivative of g%)

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