What is the three step approach for security valuation

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1. What is the three step approach for security valuation and how does it apply to bond pricing?

2. How does the length of time until maturity for a bond impact the relationship between market rates of interest and bond prices? Explain.

3. Which is more sensitive to a change in interest rates, a zero-coupon bond or a 10% coupon bond? Why might this be?

4. Would you ever pay more than $1,000 to buy a $1,000 non-convertible zero coupon bond? Explain.

Reference no: EM132783116

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