A bond you are evaluating has a 7.5 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?
  • What do your answers to parts (a) and (b) say about the relation between required rates of return and fair values of bonds?