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Assume that you purchased a $1,000 perpetual bond (coupon payment is $50) and the interest rate on that bond declined from 5 percent to 2
Assume that you purchased a $1,000 perpetual bond (coupon payment is $50) and the interest rate on that bond declined from 5 percent to 2 percent. Thus,
A) the bond price increased by $1,500
B) you could sell this bond at a capital gain
C) at an interest rate of 2%, the speculative demand for money would increase
D) all of the above
E) none of the above
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