If interest rates on 5-year treasuries rise over the next 5, Financial Management

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If interest rates on 5-year treasuries rise over the next 5

A. What are the prices of two bonds, each with face value of $1000: a 10-year zero-coupon corporate bond trading at 200 basis points over Treasuries, and a municipal green bond with a 3% coupon trading at 50 basis points over Treasuries. (Assume coupons are paid semi-annually for both bonds. Treasury rate = 2.88%

B. If interest rates on 5-year Treasuries rise over the next 5 years to 4.0%, and the spreads stay the same, what would the prices of the two bonds be in 5 years?

C. Which bond is more volatile?

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Financial Management: If interest rates on 5-year treasuries rise over the next 5

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