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1. Explain the basic relationship of interest rates and bond prices. 2. Give an example of the effect of interest rate changes on a fixed

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1. Explain the basic relationship of interest rates and bond prices. 2. Give an example of the effect of interest rate changes on a fixed coupon bond, what factors cause the relationship discussed in answer 1. 3. How can the same bond sell at par, at a discount, and at a premium over its life? 4. What can an issuer of bonds do to attempt to mitigate the basic relationship discussed in 1

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