You hold two bonds. One is a 10-year, zero coupon, issue and the other is...
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You hold two bonds. One is a year, zero coupon, issue and the other is a year bond that pays a annual coupon. The same market rate, applies to both bonds. If the market rate rises from the current level, the zero coupon bond will experience the larger percentage decline.
b The shorter the time to maturity, the greater the change in the value of a bond in response to a given change in interest rates.
c You hold two bonds. One is a year, zero coupon, bond and the other is a year bond that pays a annual coupon. The same market rate, applies to both bonds. If the market rate rises from the current level, the zero coupon bond will experience the smaller percentage decline.
d The time to maturity does not affect the change in the value of a bond in
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