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Please explain in detail how you reached the answer and show mathematical calculations (and not just the results). You are interested in two bonds. Coupons
Please explain in detail how you reached the answer and show mathematical calculations (and not just the results).
You are interested in two bonds. Coupons are paid annually. Which bonds price will change more (in percentage terms) as interest rates fall? Why?
Bond | Matures in | Coupon Rate | Current Price |
Smith Inc. | 5 years | 8% | $1000.00 |
Vortex | 10 years | 5% | $798.70 |
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