Financial Risk Manager Part 1
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A bond fund manager has requested quotes from a bond dealer on two bonds, Bond X and Bond Y. Bond X has a 10% annual coupon rate, while Bond Y has a 6% annual coupon rate. Both bonds have a face value of USD 100 and mature in 5 years. The current yield to maturity for both bonds is 8%. What is the difference in their prices?
A bond fund manager has requested quotes from a bond dealer on two bonds, Bond X and Bond Y. Bond X has a 10% annual coupon rate, while Bond Y has a 6% annual coupon rate. Both bonds have a face value of USD 100 and mature in 5 years. The current yield to maturity for both bonds is 8%. What is the difference in their prices?
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