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Need help with these two! 1. If the current twenty-year bond rate on Asa bonds is 5.88%, what is the price of a $1,000 bond
Need help with these two!
1. If the current twenty-year bond rate on Asa bonds is 5.88%, what is the price of a $1,000 bond selling at a discount?
2. In the previous problem, if the twenty-year bond interest rate increases to 6.88%, what is the percentage change in the price of the bond? Please briefly explain why the price changed the way it did.
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