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shahabkhon shahabkhon
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A year ago
Assume that a 15-year Treasury bond has a 17% annual coupon, while a 20-year T-bond has a 9% annual coupon. Assume also that the yield curve is flat, and all Treasury securities have a 13% yield to maturity. Which of the following statements is correct?


▸

The 15-year bond would sell at a premium, while the 20-year bond would sell at par.



▸

The 15-year bond would sell at a discount, while the 20-year bond would sell at a premium.



▸

If interest rates increase, the prices of both bonds will decrease, but the 15-year bond would have a larger percentage decrease in price.



▸

If interest rates increase, the prices of both bonds will decrease, but the 20-year bond would have a larger percentage decrease in price.

Textbook 
Financial Management: Theory and Practice

Financial Management: Theory and Practice


Edition: 4th
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WoodyNRexWoodyNRex
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A year ago
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shahabkhon Author
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A year ago
Thank you, thank you, thank you!
MAry1395
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Brilliant ツ
jmelchor77
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2 hours ago
You make an excellent tutor!
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