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Problem 4 Consider a 12 year, 12% annual coupon on bond with a required return of 10 percent. The bond has a face value of
Problem 4 Consider a 12 year, 12% annual coupon on bond with a required return of 10 percent. The bond has a face value of $ 1,000 (interest is paid semi annually). A) What is the current price of the bond? B) If interest rates rise to 11%, what is the price of the bond? C) What has been the percentage change in price?
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