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PLEASE TYPE THE ANSWER. Don't handwrite it . Eric purchased the following bond at par value (face value): Face Value $1,000 Coupon Rate 5% Maturity

image text in transcribedPLEASE TYPE THE ANSWER. Don't handwrite it

. Eric purchased the following bond at par value (face value): Face Value $1,000 Coupon Rate 5% Maturity 20 years Interest paid semi-annual Assume that 5 years later, interest rates in the market decrease: 1. If Eric sells it, will he get more or less than face value? 2. Assume that Jessica buys the bond from Eric for $1,040. How much is she entitled to receive each year? What is her annual yield? T T T Arial 3 (12pt) A T- ABC A Path: n Words:0

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