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Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by 1%? 1. 10-year,
Which of the following bonds would have the greatest percentage increase in value if all interest rates in the economy fall by 1%?
1. | 10-year, zero coupon bond. | |
2. | 1-year, 10% coupon bond. | |
3. | 20-year, zero coupon bond. | |
4. | 20-year, 5% coupon bond. | |
5. | 20-year, 10% coupon bond. |
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