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Question 4 You own a 10-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 7%. What
Question 4 You own a 10-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 7%. What is true about the change in value of your bonds, if interest rate falls from 12% to 8%? The value of the 20-yr bond will decrease by $60 more than the 10-yr bond The value of the 20-yr bond will decrease by $27 more than the 10-yr bond The value of the 20-yr bond will increase by $60 more than the 10-yr bond The value of the 20-yr bond will increase by $27 more than the 10-yr bond .The value of the 20-yr bond will increase by $72 more than the 10-yr bond 5 pts Question 6 Value a 20-yr, non-callable bond that pays coupons of 8% assuming market interest rates are 3%. $989 $1,748 $1,000 $1,455 $802 5 pts
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