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Brittany and Christina Both Buy Bonds with Yield to Maturity

Question 60

Multiple Choice

Brittany and Christina both buy bonds with yield to maturity of 4%, but Brittany's bond has 2 years to maturity and Christina's has 5. After one year, yields for these bonds rise to 7%.


A) Both bonds rise in value but Brittany's rises more.
B) Both bonds rise in value but Christina's rises more.
C) Both bonds fall in value but Brittany's falls more.
D) Both bonds fall in value but Christina's falls more.

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