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Consider a 1 6 - year, 9 percent annual coupon bond with a face value of $ 1 , 0 0 0 . The bond
Consider a year, percent annual coupon bond with a face value of $ The bond is
trading t a market yield to maturity of percent.
a What is the price of the bond?
b If the market yield to maturity increases to percent, what will be the bond's new
price?
c Using your answers to parts a and b what is the percentage change in the bond's
price as a result of the percent increases in interest rates?
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