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A bond you are evaluating has a 7 percent coupon rate (compounded semiannually), a $1,000 face value, and is 10 years from maturity. (LG 3-4)
A bond you are evaluating has a 7 percent coupon rate (compounded semiannually), a $1,000 face value, and is 10 years from maturity. (LG 3-4) 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 relation between required rates of return and fair values of bonds?
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