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Information on four bonds is presented in the table. Each bondhas a face value of $100. Each bond that pays a coupon pays itannually.BONDMATURITY (YEARS)COUPON RATEYTMA10%5%B56%7%C1010%9%D200%8%a) Compute the percentage change in the price of each bondassuming its yield to maturity (YTM) increases by 1%, for example,from 5% to 6%.b) If you think that bond yields generally will decrease in thenext 3 months, which bond would you prefer to own now? Brieflyexplain.
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