We are going to do something very similar to what we just


We are going to do something very similar to what we just did. Y ou own two $1,000 par bonds, one in this problem and one in the next. I want to illustrate something else. Both of these bonds are zero coupon bonds, which simply means they pay no coupon. The first bond matures in 2 years, and yields 8%. If the required yield drops to 6% (instantaneously, so the maturity does not change), what is the percentage price change? Answer in percent to three decimal places.

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Financial Management: We are going to do something very similar to what we just
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