Question: ............. Q4. BOND PRICE SENSITIVITY - 6 MARKS Consider a 6-year zero-coupon bond and a 6-year coupon bond with 8% annual coupons. Required: A. Estimate

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Q4. BOND PRICE SENSITIVITY - 6 MARKS Consider a 6-year zero-coupon bond and a 6-year coupon bond with 8% annual coupons. Required: A. Estimate the percentage change in price of the zero-coupon bond if its yield to maturity increases from 4% to 5%? (2 marks) B. Estimate the percentage change in price of the coupon bond if its yield to maturity increases from 4% to 5%? (4 marks)

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