10-Year Treasury Bond Has an 8% Coupon, and an 8-Year

question 10

Multiple Choice

10-year Treasury bond has an 8% coupon, and an 8-year Treasury bond has a 10% coupon.Both bonds have the same yield to maturity.If the yield to maturity of both bonds increases by the same amount, which of the following statements would be CORRECT?

• A)The prices of both bonds will decrease by the same amount.
• B)Both bonds would decline in price, but the 10-year bond would have the greater percentage decline in price.
• C)The prices of both bonds would increase by the same amount.
• D)One bond's price would increase, while the other bond's price would decrease.
• E)The prices of the two bonds would remain constant.

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Definitions:

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Techniques or strategies used to manage, reduce, or resolve disagreements or disputes in interpersonal relationships or group settings.

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A dynamic where power or influence is distributed through discussion, compromise, or agreement between parties.

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