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One year ago, Auto Land issued 30-year bonds at par. The bonds have a coupon rate of 5% and pay interest annually. Today, the market
One year ago, Auto Land issued 30-year bonds at par. The bonds have a coupon rate of 5% and pay interest annually. Today, the market rate of interest on these bonds is 5.2% APR. How does today's price of this bond compare to the issue price? (Hint: Think about how changes in YTM impacts bond prices. Then find the current market price of the bond and recall percentage change in price = (new bond price old bond price) / old bond price.)
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