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Interest rate risk and bond price changes Apex Corp. has two outstanding bond issues. One...

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Finance

Interest rate risk and bond price changes Apex Corp. has two outstanding bond issues. One issue consists of 9% annual coupon bonds and the other issue consists
of zero-coupon bonds. For each bond issue, calculate the bond prices and percentage change in prices when the required rate of return changes from 9% to 10%.
a. Ten years to maturity and the required rate of return goes from 9% to 10%.
b. Twenty years to maturity and the required rate of return goes from 9% to 10%.
c. Ten years to maturity and the required rate of return goes from 9% to 8%.
d. Twenty years to maturity and the required rate of return goes from 9% to 8%.
e. Compare and contrast your answers for parts a through d and comment on your observations.
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