Unknown Variable Value Variable Name Bond's semiannual coupon payment $37.50 Bond's par value $1,000 4.5000% Semiannual required return to expect that Grace's potential bond investment is currently exhibiting an intrinsic Based on this equation and the data, it is reasonable value less than $1,000. Now, consider the situation in which Grace wants to earn a return of 4.50%, but the bond being considered for purchase offers a coupon rate of 7.50%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is_ its par value, so that the bond is What will happen to the price of a fixed-rate bond when expectations for inflation fall? O The bond price will rise. The bond price will fall