Consider the following two bonds with $1000 face value:
Bond A: 10 - year, 10% coupon bond
Bond B: 10 - year, zero - coupon bond
Compute the change in market values of each of the bonds when the rates decrease from 13.5% to 12 %
Bond A: 10 - year, 10% coupon bond
Bond B: 10 - year, zero - coupon bond
Compute the change in market values of each of the bonds when the rates decrease from 13.5% to 12 %