Define interest rate risk on bond prices

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Problem (a) Define interest rate risk on bond prices.

Problem (b) Anson is studying the interest rate risk of two bonds that he is holding. Bond A is with longer term to maturity than Bond B, all else being equal. Which bond is with a higher interest rate risk? Please explain.

Problem (c) Anson is also studying the interest rate risk of two other bonds that he is holding. Bond C is with a higher coupon rate than Bond D, all else being equal. Which bond is with a higher interest rate risk? Please explain.

Reference no: EM132964139

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