The following information relates All three bonds are currently trading at par value. Relative to Bond C,
Question:
The following information relates
All three bonds are currently trading at par value.
Relative to Bond C, for a 200 bp decrease in the required rate of return, Bond B will most likely exhibit a(n):
A. Equal percentage price change.
B. Greater percentage price change.
C. Smaller percentage price change.
Transcribed Image Text:
Bond A B C Coupon Rate 6% 6% 8% Maturity (years) 10 5 5
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The answer is B Greater percentage price change The price of a bond is inversely related to the requ...View the full answer
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