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Alice just bought a 5-year US Treasury bond priced at par with an 8% coupon rate. After she bought it the Federal Reserve loosened credit
Alice just bought a 5-year US Treasury bond priced at par with an 8% coupon rate. After she bought it the Federal Reserve loosened credit to stimulate the economy. As a result, similar bonds issued at par would have a 7% coupon Estimate the price of Alice's bond now if its yield-to-maturity decreased to 7% Select one: O a $1,025.00 to $1,050.00 Ob $1,000.00 to $1,025.00 c. $950.00 to $975.00 Od $1,050,00 to $1,075.00 O e. $975.00 to $1,000.00 O 1 $1,075 00 to $1,100.00 9 Loss than $900 00 Oh $900.00 to $925 00 O More than $1,100.00 O $925 00 to $950 00
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