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Author Question: Assume that a 15-year Treasury bond has a 17% annual coupon, while a 20-year T-bond has a 9% annual ... (Read 118 times)

mustachegiraffe

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on: Aug 7, 2023
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?

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


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


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


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

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
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Marked as best answer by mustachegiraffe on Aug 7, 2023

jojomac20

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Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
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mustachegiraffe

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Reply 2 on: Aug 7, 2023
Gracias!

tanna.moeller

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Reply 3 on: Yesterday
Great answer, keep it coming :)

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