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Suppose you own $100 face value of a 12 year bond with a yield to maturity of 5% and which is currently priced at par.
Suppose you own $100 face value of a 12 year bond with a yield to maturity of 5% and which is currently priced at par. If the bonds yield to maturity rises to 6% or falls to 4% the bonds value will change. Which would be a smaller dollar amount, your loss or your gain? Create an example to prove your answer.
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