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7. Which of the following bonds will have the greatest percentage increase in value if all interest rates decrease by 1 percent? a. 20-year, zero coupon bond. b. 10-year, zero coupon bond. c. 20-year, 10 percent coupon bond. d. 20-year, 5 percent coupon bond. e. 1-year, 10 percent coupon bond.

7. Which of the following bonds will have the greatest percentage increase in value if all interest rates decrease by 1 percent? a. 20-year, zero coupon bond. b. 10-year, zero coupon bond. c. 20-year, 10 percent coupon bond. d. 20-year, 5 percent coupon bond. e. 1-year, 10 percent coupon bond.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7. Which of the following bonds will have the greatest percentage increase
in value if all interest rates decrease by 1 percent?
a. 20-year, zero coupon bond.
b. 10-year, zero coupon bond.
c. 20-year, 10 percent coupon bond.
d. 20-year, 5 percent coupon bond.
e. 1-year, 10 percent coupon bond.

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