Which bond is more sensitive to interest rate change

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Reference no: EM131957090

Star, LLC, has a 5 year bond outstanding coupon rate of 7%, paid semiannually, and is currently priced at par., which is 1000$. Moon LLC has an identicial bond except that it matures in 15 years,. If market rates suddenly drop by 2%, by what percent does each bond price change? Which bond is more sensitive to interest rate change.

Reference no: EM131957090

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