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Please do not copy other answers A bond with annual coupons and a face-value of 1 sells for 1+p at a certain fixed annual effective
Please do not copy other answers
A bond with annual coupons and a face-value of 1 sells for 1+p at a certain fixed annual effective yield rate. Assuming no other changes in the structure of the bond, if the coupon rate of the bond was halved (i.e. half of the original amount), the price that the bond would sell for would become 1+q. Assuming that no other changes are made to the structure of the bond, what would the bond sell for if the coupon rate was doubled (i.e. two times the original amount)? Give your answer in terms of p andStep by Step Solution
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