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Given a 10-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually, determine its value for the following yields: 8%,
Given a 10-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually, determine its value for the following yields: 8%, 6%, and 10%. What are the percentage changes in value when the yield goes from 8% to 6% and when it goes from 8% to 10%? Comment on the price and interest rate relation you observe for this 10-year bond and the price and interest rate relation you observe for the five-year bond in Question 2.1.
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