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Consider a six-year maturity, $100,000 face value bond that pays a 5 percent fixed coupon annually. Briefly discuss all your results below. What is the
Consider a six-year maturity, $100,000 face value bond that pays a 5 percent fixed coupon annually. Briefly discuss all your results below.
- What is the price of the bond if market interest rates are 4 percent?
- What is the percentage price change for the bond if interest rates decline 50 basis points from the original 5 percent?
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