Unformatted text preview: : Interest Rate Risk. Consider three bond with 3% coupon rates, all making annual coupon payments and all selling at face
value. The short—term be nd has a maturity at 4 years, the interr'nediate-term bond has maturity E years, and the long-term
bond has maturity 30 years. a. What will be the price of each bend if their yields increase to 9%? b. What will be the price of
each band if... c-- __-..._- JL. 1mm. u "wanna ...
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- Fall '15
- Finance, maturity E years