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6) You buy a 5 -year bond that pays a $4 coupon each year for five years (first coupon paid the end of year 1

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6) You buy a 5 -year bond that pays a $4 coupon each year for five years (first coupon paid the end of year 1 ). At the end of 5 years, you receive back your principle of $100 (in addition to the final coupon payment of $4 ). Immediately after you purchase the bond, interest rates move to 7%. What is the present value of the cash flows you will receive? Now say rates moved to 2%, what is the present value of the cash flows you receive

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