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Dominion Groceries Inc. has a 9-year, 6% annual coupon bond outstanding with a $1,000 face value. Fresh Produce Inc. has a 10-year, 4% annual coupon
Dominion Groceries Inc. has a 9-year, 6% annual coupon bond outstanding with a $1,000 face value. Fresh Produce Inc. has a 10-year, 4% annual coupon bond with a $1,000 Face Value. Both bonds currently have a YTM of 5.5%. Which of the following statements is correct if the market yield increases to 6%? a- The dominion bond will increase in value by 3.36% b- Both bonds would decrease in value by 3.36% c- The fresh bond will decrease in value by $35.76 d- The fresh bond will increase in value by 3.85% e- none of the above
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