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Which bond price would change by a larger amount

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Reference no: EM131633380

Question: Consider two bonds, a 10-year premium bond with a coupon rate higher than its required rate of return and a zero coupon bond that pays only a lump sum payment after 10 years with no interest over its life. Which do you think would have more interest rate risk-that is, which bond's price would change by a larger amount for given changes in interest rates? Explain your answer.

Reference no: EM131633380

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