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Eric bought a newly issued 5 year bond from Delta Airlines with a $10,000 face value and a 10% coupon on February 1, 2020.
Eric bought a newly issued 5 year bond from Delta Airlines with a $10,000 face value and a 10% coupon on February 1, 2020. (no impact of corona virus please! ;-)) a) How much did Eric pay for his bond? b) What is the coupon in dollars paid on this bond? c) What is the yield on Eric's bond if he holds it to maturity? d) One week later interest rates increase to 12%. Eric decides to sell his bond after this increase in interest rates. What is the value of his bond?
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