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Three years ago, you purchased a seven-year $1,000 par value corporate bond with a coupon interest rate of 5 percent. Today comparable bonds are paying

Three years ago, you purchased a seven-year $1,000 par value corporate bond with a coupon interest rate of 5 percent. Today comparable bonds are paying 6.5 percent. For simplicity, we assume that the interest is paid annually.

a) What is the dollar price for which you could sell your bond?

b) What is the current yield on the bond?

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