Bond value and interest rate risk For each pair of bonds say which one has more interest

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Bond value and interest rate risk For each pair of bonds say which one has more interest rate risk and why it has more interest rate risk.

a. Bond A has a 5% annual coupon, 20-year maturity, and is selling at a premium.

Bond B has a 5% annual coupon, 20-year maturity, and is selling at a discount.

b. Bond M is an annual coupon bond with 15 years to maturity, and a required return of 8%.

Bond N is zero-coupon bond with 15 years to maturity, and a required return of 8%.

c. Bond Y has a 9% annual coupon, a required return of 8%, and 17 years to maturity.

Bond Z has a 9% annual coupon, a required return of 8%, and 12 years to maturity.

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Principles Of Managerial Finance

ISBN: 9781292400648

16th Global Edition

Authors: Chad Zutter, Scott Smart

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