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Suppose each of two bonds with par value of $1,000 pays $70 annually. The first bond will mature in 5 years, while the second bond
Suppose each of two bonds with par value of $1,000 pays $70 annually. The first bond will mature in 5 years, while the second bond - in 6 years. If the yields to maturity on the two bonds change from 10% to 15%, which of the bonds will change in value more? What will be the change in value - increase or decrease for each of the bonds? Explain
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