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Two bonds have par values of$1,000. One is 5.5%, 10-year bond priced to yield 8.0%. The other isa(n) 7%,22-year bond priced to yield 6.5%. Which
Two bonds have par values of$1,000. One is 5.5%, 10-year bond priced to yield 8.0%. The other isa(n) 7%,22-year bond priced to yield 6.5%. Which of these two has the lowerprice? (Assume annual compounding in bothcases.)
Theprice, PV, of the 5.5% 10-year bond is $ (Round to the nearestcent.)
Theprice, PV, of the 7%,22-year bond is $ (Round to the nearestcent.)
Which of these two has the lowerprice?
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