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5 Points each 5. What is the value of a one-year, $1,000 par value bond with a 12 percent annual coupon if its required rate
5 Points each 5. What is the value of a one-year, $1,000 par value bond with a 12 percent annual coupon if its required rate of return is 12%? a. What would be the value of the bond if, just after it had been issued, the expected inflation rate fell by 3 percentage points, causing investors to require a 9% return? Would this now be a discount or premium bond? How could one determine this without performing any calculations? b. What would happen to the bond's value if inflation rose, and the required rate increased to 15%? SHOW CORRECT AND COMPLETE TIMELINES. USE GRID FOR SOLVING. ROUND TO THE NEAREST DOLLAR Time lines
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