Question
A General Power bond with a face value of $1,000 carries a coupon rates of 9.4%, has 9 years until maturity, and sells at a
A General Power bond with a face value of $1,000 carries a coupon rates of 9.4%, has 9 years until maturity, and sells at a yield to maturity of 8.4%. (Assume annual interest payments.)
a. what interest payments do bondholders receive each year? interest payments_____________
b. at what price does the bond sells? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
price__________
c. what will happen to the bond price if the yield to maturity falls to 7.4%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
price will either (rise or fall)________by ________
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