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Question
Consider a zero-coupon bond with a $1,100 payment in one year. Suppose the interest rate decreases from 10% to 8%. The price of this bond:A. increases from $1,000 to $1,018.
B. increases from $1,000 to $1,375.
C. decreases from $110 to $88.
D. decreases from $1,210 to $1,188.
Answer
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