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Consider a standard coupon bond ($1,000 face value with semi-annual coupons) has a coupon rate of 9% and a yield to maturity of 6% over

Consider a standard coupon bond ($1,000 face value with semi-annual coupons) has a coupon rate of 9% and a yield to maturity of 6% over its 20 year remaining life.

a) What would be its price (now)?

b) What would be the bonds current yield and its capital gain (loss) yield?

c) What would the price of the above bond be, 5 years later if the yield to maturity had dropped 100 basis points over the 5-year period?

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