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Suppose you bought a 20-year, $1,000 face-value bond for par 5 years ago. The annual coupon rate on this bond is 8.5% and interest payments
Suppose you bought a 20-year, $1,000 face-value bond for par 5 years ago. The annual coupon rate on this bond is 8.5% and interest payments are paid annually. If returns required by bond holders are now 1.5% higher than they were 5 years ago, then how much of a decrease have you experienced in the price of your bond?
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