Question: 3. Suppose a recently published report indicates inflation in both Canada and the U.S. is becoming excessive and the Canadian dollar is weakening. You hear

3. Suppose a recently published report indicates inflation in both Canada

3. Suppose a recently published report indicates inflation in both Canada and the U.S. is becoming excessive and the Canadian dollar is weakening. You hear a news report that the bond prices are falling. Which of the following Canadian bonds would experience the lowest % price decrease? Why? (4 marks) i. Low coupon, short-term ii High coupon, long term iii. High coupon, short term iv. Low coupon, long-term

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