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Business, 27.03.2021 06:00 moraaa83egdjr

Xerox just issued two bonds. The 1st Bond is a zero coupon bond with 30 year to maturity. The 2nd Bond is a 10% coupon bond with 10 year to maturity. Assume that other characteristics of these two bonds are the same (e. g., the same YTM). You expect that the Fed will announce a decrease of benchmark interest rate. Which bond do you want to purchase in order to earn higher return around the incoming interest rate change?A) The 1st bond issued by Xerox. B) The 2nd bond issued by Xerox.

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Xerox just issued two bonds. The 1st Bond is a zero coupon bond with 30 year to maturity. The 2nd Bo...
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