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Based on the following information concerning XRT's bonds: Par value: $1,000 Years to maturity: 15 years Coupon rate: 8% paid semiannually Beta: 0.5 Risk-free rate.

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Based on the following information concerning XRT's bonds: Par value: $1,000 Years to maturity: 15 years Coupon rate: 8% paid semiannually Beta: 0.5 Risk-free rate. 4% Market risk premium: 5% What is the expected price of the bond in 5 years? You believe that the risk free rate then is likely to drop to 2% and the market risk premium is like to rise to 10% due to a worsening economic outlook. h Select one a $1,066.81 b. $1,071 06 c. $1,078.01 d. $1,060.87

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