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An investor buys a $1,000, 20 year, 8 percent (interest paid annually) bond at par. After five (5) years have passed, interest rates are now
An investor buys a $1,000, 20 year, 8 percent (interest paid annually) bond at par.
After five (5) years have passed, interest rates are now 10 percent.
(1) How much can you sell the bond for now (after 5 years)?
(2) How much would the investor LOSE if they sell the bond now?
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