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Question
Examine Example 17-13. The basic data is repeated here, in financial calculator format: FV = 1000, N=30, PMT=50| I/Y | Price=PV | % change |
| At 10% | $1,000.00 | |
| At 8% | $1,172.93 | +17.29 % |
| At 12% | $ 862.35 | -13.77 % |
a) They are actually the same: the table includes an error.
b) The prices shown are rounded to the nearest penny, slightly moving the % changes.
c) The relationship between interest rates and price is not linear.
d) Other factors, including duration and coupon rate, will also affect the relationship between interest rates and prices.
Answer
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