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Market interest rates rise from 10% and 15%. Bond face values = $1000. Price each bond at 10% and then at 15%. (For example: For
Market interest rates rise from 10% and 15%. Bond face values = $1000. Price each bond at 10% and then at 15%. (For example: For bond in d, at r=10%, bond value = $200/1.101 + $1200/(1.10)2= $1173.55.) Also show their % gain or loss (= dividing the end value at 15% by the beginning value at 10%, and subtracting 1.) ________Bond__________ r = 10%___ r = 15%___ % Gain or Loss? a. 1-yr. 10% coupon bond $1000.00 ? ? b. 30-yr., 10% coupon bond ? 672 ? c. 2-yr, zero coupon bond ? ? ? d. 2-yr, 20% coupon bond $1173.55 ? ?
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