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What would be the market price of each bond

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Reference no: EM132853421

Question - Consider 3 bonds with maturities of 3, 6, and 9 years. All three bonds have a coupon rate of 5.5%, face values of $1,000, and make semiannual coupon payments. Now answer the following questions:

Required -

a) What would be the market price of each bond if their YTM was 4.5%?

b) What would be the market price of each bond if their YTM was 6.5%?

c) What conclusions can you make regarding the relation between the time to maturity and the sensitivity of bond prices to changes in interest rates?

Reference no: EM132853421

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