Business
Business, 16.11.2020 17:50, izquierdohannah

Consider two bonds, a 3-year bond paying an annual coupon of 5% and a 10-year bond also with an annual coupon of 5%. Both currently sell at a face value of $1,000. Now suppose interest rates rise to 10%. a. What is the new price of the 3-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price b. What is the new price of the 10-year bonds? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Bond price c. Which bonds are more sensitive to a change in interest rates? O Long-term bonds O Short-term bonds

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Consider two bonds, a 3-year bond paying an annual coupon of 5% and a 10-year bond also with an annu...

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