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Assume that all interest rates (i.e. discount rates) in the economy rise from 2% to 5%....

Assume that all interest rates (i.e. discount rates) in the economy rise from 2% to 5%. Which of the following bonds is the most sensitive to the change in interest rates? (Show the work leading to your answer) a. A 1-year bond with 10% coupon rate b. A 6-year bond with 5% coupon rate c. A 10-year zero-coupon bond d. A 20-year 5% coupon bond

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