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Fix-It, Inc., recently issued 10-year, $1,000 par face value bonds at an 8% coupon rate. a. 2 years later, similar bonds are yielding investors 6%.
Fix-It, Inc., recently issued 10-year, $1,000 par face value bonds at an 8% coupon rate. a. 2 years later, similar bonds are yielding investors 6%. At what price are Fix-It's bonds selling? b. What would the bonds be selling for if the yields had risen to 12%? c. Assume the conditions in part (a). Further assume that interest rates remain at 6% for the nex 8 years. What would happen to the price of the Fix-It bonds over that time?
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