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Business, 27.06.2019 08:50 314180

It is a myth that bonds are always less risky than stocks. bond investors can really lose their shirts (go broke) in a rising interest rate environment. suppose you buy a 12-year bond with a face value of $10,000 and a coupon rate of 2%. interest rates unexpectedly double over the next 12 months. you become discouraged and cash out. how much will you be able to raise by selling the bond?

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