Question: 5. a. Explain why the yield on a bond that trades at a discount exceeds the bonds coupon rate. b. Why are longer-term bonds more

5. a. Explain why the yield on a bond that trades at a discount exceeds the bonds coupon rate.

b. Why are longer-term bonds more sensitive to changes in interest rates than shorter term bonds?

c. Does the bonds YTM determine its price or does the price determine the YTM?

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