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Q 4 ( Essential to cover ) Consider the following bonds: Bond A: A 2 - year zero - coupon bond with a face value
QEssential to cover Consider the following bonds:
Bond A: A year zerocoupon bond with a face value of $ and YTM
Bond B: A year parvalue bond with a face value of $ and coupon.
Bond C: A year parvalue bond with a face value of $ and coupon.
Bond D: A year parvalue bond with a face value of $ and coupon.
Bond E: A year parvalue bond with a face value of $ and coupon.
Bond F: A year discount bond with a face value of $ and coupon.
If the yield curve shifts upwards by one percent,
a Which bond among bonds A B and C will experience the largest percentage price change? Which will have the lowest percentage price change?
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