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During recessionary periods, bonds that were issued many years ago have a higher coupon rate than currently issued bonds. Therefore, they may sell at a
During recessionary periods, bonds that were issued many years ago have a higher coupon rate than currently issued bonds. Therefore, they may sell at a premium, a price higher than their face value, because of currently low coupon rates. A $ bond that was issued years ago is for sale for $ What rate of return per year will a purchaser make if the bond coupon rate is per year payable quarterly, and the bond is due years from now?
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