Bond Yields and Prices

For example, with an increase in the yield from 8 to 9%, the price of the 4-year bond falls (967.6/1000) –1, or 3.24% but the 30-year bond price falls (897.26/1000) – 1, or 10.27%. 32. The bond’s yield to maturity will increase from 8.5%, effective annual interest (EAR) to … ................
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