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The Sheridan Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.325 percent. The current market rate for

The Sheridan Department of Transportation has issued 25-year bonds that make semiannual coupon payments at a rate of 10.325 percent. The current market rate for similar securities is 11.8 percent. Assume that the face value of the bond is $1,000.

1.Current market value $?

2.What will be the bonds price if rates in the market

(i) decrease to 9.80 percent ?

(ii) increase to 12.8 percent?

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