Question: please explain why 4) Consider two bonds, each with exactly 5 years to maturity, each trading with a 7% yield to maturity. Bond A has

please explain why
please explain why 4) Consider two bonds, each with exactly 5 years

4) Consider two bonds, each with exactly 5 years to maturity, each trading with a 7% yield to maturity. Bond A has a 5% coupon rate Bond B has a 0% coupon rate. If the yield curve experiences an immediate and parallel shift so that each bond now trades at a price to yield 3% to maturity, which is the best statement of those below? Bond A will experience a greater decline in value than will Bond B Bond A will experience a smaller % decline in value than wil Bond B Bond A will experience the same decline in value as will Bond B All of the above None of the above

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