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A company issued a bond with a (stated) interest rate of 4% and a price of 95 (percent of principal) when the market rate of
A company issued a bond with a (stated) interest rate of 4% and a price of 95 (percent of principal) when the market rate of interest for a bond of similar time period and riskiness was 5%. Since the date of issuance, the market price of the bond has risen to 110. Which of the following is true? a. The market rate of interest has increased since the bond was issued. b. The market rate of interest has decreased since the bond was issued. c. The coupon (stated) rate of the bond has increased since the bond was issued. d. The coupon (stated) rate of the bond has decreased since the bond was issued
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