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For all questions, assume a par value is $1,000 and semiannual bond interest payments. 1) Suppose Bay Path actually offers a coupon rate of 6%
For all questions, assume a par value is $1,000 and semiannual bond interest payments.
1) Suppose Bay Path actually offers a coupon rate of 6% on its twenty-year bonds, expecting to sell the bonds at par. What will happen to the price of a single bond with a par value of $1,000 if the required bond yield unexpectedly falls to 5% or rises to 7%?
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