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Consider a Zero-Coupon Bond with 20 Years to Maturity

Question 54

Multiple Choice

Consider a zero-coupon bond with 20 years to maturity.The percentage change in the price of the bond if its yield to maturity decreases from 7% to 5% is closest to:


A) 46%.
B) 17%.
C) 22%.
D) 38%.

Correct Answer:

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