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A bond you are evaluating has a 12 coupon rate (compounded semiannually), $1000 face value, and is 15 years from maturity. a. If the required
A bond you are evaluating has a 12 coupon rate (compounded semiannually), $1000 face value, and is 15 years from maturity.
a. If the required rate of return on the bond is 6 percent, what is its fair present value?
b. If the required rate of return on the bond is 8 percent, what is its fair present value?
c. What do your answers to parts a) and b) say about the relationship between the required rates of return and fair values of bonds?
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