You own a 15-year bond and a 20-year bond, both of which are non-callable bond and pay

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You own a 15-year bond and a 20-year bond, both of which are non-callable bond and pay a coupon of 5%. What is true about the change in value of your bonds if interest rate rises from 7% to 11%?

The value of the 20-yr bond will decrease by $17 more than the 15-yr bond

The value of the 20-yr bond will decrease by $11 more than the 15-yr bond

The value of the 20-yr bond will decrease by $38 more than the 15-yr bond

The value of the 20-yr bond will increase by $24 more than the 15-yr bond

The value of the 20-yr bond will increase by $11 more than the 15-yr bond

Related Book For answer-question

Financial Institutions Management A Risk Management Approach

ISBN: 978-0071051590

8th edition

Authors: Marcia Cornett, Patricia McGraw, Anthony Saunders

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Posted Date: Feb 10, 2024 10:56 PM

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You own a 15-year bond and a 20-year bond, both of which are non-callable bond and pay

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Financial Institutions Management A Risk Management Approach

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