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3) You have bought a $1000 bond that pays 10% coupon annually and has 3 years to maturity. If market interest rate rises to 11%

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3) You have bought a $1000 bond that pays 10% coupon annually and has 3 years to maturity. If market interest rate rises to 11% per year on such a bond. a) How much will be the price of the bond after this drop if the bond still has 3 years to mature? (2 marks) b) How much will be the price of the bond after this drop if the bond has 2 years to mature? (2 marks)

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