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Rico and Ruben are friends. Rico purchased, for a $100 price, a $100 face value bond that pays interest annually at 10%. The principal is

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Rico and Ruben are friends. Rico purchased, for a $100 price, a $100 face value bond that pays interest annually at 10%. The principal is due and payable at the end of 5 years. Ruben purchased, for a $100 price, a deeply discounted "zero coupon" bond that pays nothing annually, but that has a final lump sum payment of $161.05 at the end of 5 years. The YTM for both are 10%. Assume both bonds are U.S. treasury backed with NO credit risk. What other risk exists? Explain such risks

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