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Scott purchased a 7-year, 4% annual coupon bond with the YTM of 4%. Lee invested in a 10-year, 6% annual coupon bond with the YTM of 4%.

Ms. Scott purchased a 7-year, 4% annual coupon bond with the YTM of 4%. Ms. Lee invested in a 10-year, 6% annual coupon bond with the YTM of 4%. If interest rates go up by 2 percentage points due to inflation (that is, the YTM becomes 6%), who will have more capital loss? Why? Explain

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