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johnpaech johnpaech
wrote...
Posts: 1098
Rep: 7 0
6 years ago
The amount that the price of bond "B" will change if its yield to maturity increases from 7% to 8% is closest to:
A) -$36
B) $9
C) $36
D) $39
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
Read 63 times
1 Reply

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Replies
wrote...
6 years ago
D
Explanation:  D)

Bond   Years to maturity   
Coupon   
YTM   
Price0   
Price1   
$ Chg
A   1   0%   5%   $952.38    $943.40    ($8.98)
B   5   6%   7%   $959.00    $920.15    ($38.85)
C   10   10%   9%   $1064.18    $1000.00    ($64.18)
D   20   0%   8%   $214.55    $178.43    ($36.12)
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