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Assume that all interest rates in the economy decline from 10% to 9%. Which of the following bonds would have the LARGEST percentage increase in price?

a. an 8-year bond with a 9% coupon

b. a 1-year bond with a 15% coupon

c. a 3-year bond with a 10% coupon

d. a 10-year zero coupon bond

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Financial Management, Finance

Category:- Financial Management
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