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3 . Suppose you have bought a four year, 1 0 . 0 0 0 Tl coupon bond with a coupon rate 7 % when

3 .

Suppose you have bought a four year,

10.000

Tl coupon bond with a coupon rate

7 %

when the market interest rate is

7 % .

After you buy the bond, market interest rate falls to

5 % .

What happens to the value of your bond?

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