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By what percentage will the price of the bond change

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Reference no: EM132826498

Question - You buy a 10-year bond with an annual coupon rate of 10% that pays coupons once a year with a face value of $1000. The current yield-to maturity is 9.5% annually.

a) If its yield to maturity decreases by 1%, by what percentage will the price of the bond change?

b) If its yield to maturity increases by 2%, by what percentage will the price of the bond change?

Reference no: EM132826498

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