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Use the table for the question(s)below.
Consider the following four bonds that pay annual coupons:
-Assume that the YTM increases by 1% for each of the four bonds listed.Rank the bonds based upon the sensitivity of their prices from least (#1)to most (#4)sensitive.
Pearson Correlation
A measure of the linear correlation between two variables, giving a value between -1 and 1 which indicates the direction and strength of the relationship.
Null Hypothesis
A statement used in statistics that suggests no effect or no difference; it is the hypothesis that researchers typically aim to nullify or disprove.
Precipitation
Any type of water, whether in liquid or solid state, that descends from the atmosphere, encompassing rain, snow, sleet, and hail.
Significance Level
The threshold below which a null hypothesis is rejected in statistical testing, typically denoted as alpha (α).
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