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Last year, Michelle purchased a fixed-rate, 10-year bond at par that has a coupon rate of 4.2 percent. If the current market rate for this
Last year, Michelle purchased a fixed-rate, 10-year bond at par that has a coupon rate of 4.2 percent. If the current market rate for this type and quality of bond is 4.5 percent, then she should expect
the bonds current market price to exceed its face value.
her interest payments to increase.
the current yield today to be less than 4.2 percent.
the bonds yield to maturity to remain constant.
to realize a capital loss if she sells the bond at todays market price.
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