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please explain the answer! 3, Federal Farms issued bonds with a 10 year time to maturity, 5.25% coupon rate, and $1,000 face value. The bonds
please explain the answer!
3, Federal Farms issued bonds with a 10 year time to maturity, 5.25% coupon rate, and $1,000 face value. The bonds sold for $1,096.4. When the bond was issued, the inflation rate was 1%. If at the end of year five, the inflation changes and now it is expected to be 2%, what will be the price of the bond at the end of year five? 4, National city corp. issued bonds with a 9 years time to maturity, 6.875% coupon rate, and $1,000 face value. The bonds sold for $972.6. When the bond was sold, inflation rate was 3%. At the end of year 3, the inflation projections changed and it is expected to be 1.5%, what will be the price of the bond at the end of year 3? 5. Why is the current yield and the YTM differentStep by Step Solution
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