Calculate the price of a bond that matures in 8 years, has a face value of $5,000,

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Calculate the price of a bond that matures in 8 years, has a face value of $5,000, and has a coupon rate of 2% (paid semiannually) if the market interest rate is 1%. What is the price of the bond if the market interest rate drops to 0.5%?

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Financial Markets And Institutions

ISBN: 9780138043681

10th Edition

Authors: Frederic S Mishkin, Stanley Eakins

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Question Posted: Apr 08, 2024 02:00 AM

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Calculate the price of a bond that matures in 8 years, has a face value of $5,000,

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Step by Step Answer:

To calculate the price of a bond you can use the present value formula for bond pricing The formula ...View the full answer

Financial Markets And Institutions

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