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A General Power bond carries a coupon rate of 8.1%, has 9 years until maturity, and sells at a yield to maturity of 7.1%.
A General Power bond carries a coupon rate of 8.1%, has 9 years until maturity, and sells at a yield to maturity of 7.1%. (Assume annual interest payments.) a. What interest payments do bondholders receive each year? b. At what price does the bond sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.) c. What will happen to the bond price if the yield to maturity falls to 6.1%? (Do not round intermediate calculations. Round your answer to 2 decimal places.) d. If the yield to maturity falls to 6.1%, will the current yield be less, or more, than the yield to maturity? Answer is complete but not entirely correct. a. Interest payments $ 81 b. Price $ 6.10 C Price will rise by $ 7.10 d Current yield is more than yield to maturity.
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