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Consider the two bonds described below. Bond A Bond B maturity (years) 15 20 Coupon Rate (%) 10% 6% (Paid semi annually) $1,000 $1,0000 If

Consider the two bonds described below.

Bond A Bond B

maturity (years) 15 20

Coupon Rate (%) 10% 6%

(Paid semi annually) $1,000 $1,0000

If both bonds had a required return of 8%, what would the bonds prices be?

Describe what it means if a bond sells at a discount, a premium, and at its face amount (par value). Are these two bonds selling at a discount, premium or par?

If the required return on the two bonds rose to 10%, what would the bonds prices be?

would like to see the equation how the answer was found so I can learn it. :)

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