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A bond has 1 5 years to maturity, a coupon rate of 6 . 8 % , and makes annual payments of interest. Right now

A bond has 15 years to maturity, a coupon rate of 6.8%, and makes annual payments of interest. Right now the market interest rate happens to be the same 6.8% as its coupon rate. This bond must sell for _____ currently. If the market interest rate suddenly increases to 7.5%, this bonds price will _______.
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$1,000; decrease by 6.18%
$938.21; decrease by 6.59%
$1,000; increase by 6.59%
$938.21; increase by 6.18%

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