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PLEASE ANSWER ASAP For each of the following pairs of Government of Canada Bonds, identify which wil have the higher price as a percentage of
PLEASE ANSWER ASAP
For each of the following pairs of Government of Canada Bonds, identify which wil have the higher price as a percentage of the face value: a. A three-year zero-coupon bond or a five-year zero-coupon bond? b. A three-year zero-coupon bond or a three-year 4% coupon bond? c. A two-year 5% coupon bond or a two-year 6% coupon bond? a. Which will have the higher price (as a percentage of the face value), a three-year zero-coupon bond or a five-year zero-coupon bond? A. A 3-year, because the present value is recoived sooner, the futuro value is higher. B. A 3-year, because the future value is received sooner, the present value is higher. C. A 5-year, because the future value is received later, the present value is higher. D. A 5-year, because the present value is received sooner, the future value is higher. Consider the following bonds. Which of the bonds A to D is most sensitive to a 1% drop in interest rates from 6.6% to 5.6% ? Which bond is least sensitive? Provide an intuitive explanation for your answer: Bond is most sensitive. (Select from the drop-down menu) Step by Step Solution
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