Question: Multiple questions require the following scenario. Bonds A and B are discount bonds with face value of $100. Assume yield to maturity on both bonds
Multiple questions require the following scenario. Bonds A and B are discount bonds with face value of $100. Assume yield to maturity on both bonds is 5%. Bond A has maturity of 10 years and bond B has maturity of 4 years. Suppose there is a 50% chance yields remain at 5%, a 25% chance yields rise to 6%, and a 25% chance that yields fall to 4%. Calculate the standard deviation of percent change in prices of bond B. Enter as a percent, round to two decimal places and do not enter a % sign.
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