Which bond price will change more

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Reference no: EM132042582

Question: Please explain in detail how you reached the answer and show mathematical calculations (and not just the results).

You are interested in two bonds. Coupons are paid annually. Which bond's price will change more (in percentage terms) as interest rates fall? Why?

Bond	Matures in	Coupon Rate	Current Price
Smith Inc.	5 years	8%	$1000.00
Vortex	10 years	5%	$798.70

Reference no: EM132042582

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