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16. Consider a bond paying a coupon rate of 8% per year semiannually when the market interest rate is only 5%. The bond has twenty
16. Consider a bond paying a coupon rate of 8% per year semiannually when the market interest rate is only 5%. The bond has twenty years until maturity.
a. Find the bonds price today.
b. Find the bonds price six months from now after the next coupon is paid if the interest rate rises to 7%.
c. What is the total rate of return on the bond?
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