A $7,000 bond had a coupon rate of 5.50% with interest paid semi-annually. Chad purchased this bond when there were 7 years left to maturity and when the market interest rate was 5.75% compounded semi-annually. She held the bond for 2 years, then sold it when the market interest rate was 5.25% compounded semi-annually.

a. What was the purchase price of the bond?

b. What was the selling price of the bond?

c. What was Chad's gain or loss on this investment? What was the amount?

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