Consider two bonds with $1,000 face values that carry coupon rates of 8 , make annual coupon payments, and exhibit similar risk characteristics The first bond has 5 years to maturity whereas the second has 10 years to maturity The appropriate discount rate for investments of similar risk is 8 If this discount rate rises by two percentage points, what will be the respective percentage price changes of the two bonds

Question: Consider two bonds with $1,000 face values that carry coupon rates of 8%, make annual coupon payments, and exhibit similar risk characteristics. The first bond

Consider two bonds with $1,000 face values that carry rates of 8%, make annual payments, and exhibit similar risk characteristics. The first bond has 5 years to whereas the second has 10 years to The appropriate for investments of similar risk is 8%. If this rises by two percentage points, what will be the respective percentage price changes of the two bonds?

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