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Use the following information to answer the following questions: XLR Corporation just issued a $1,000 par value bond with a 7% yield to maturity, twenty
Use the following information to answer the following questions: XLR Corporation just issued a $1,000 par value bond with a 7% yield to maturity, twenty years to maturity, with an 8% semi-annual coupon rate. a. What is the price of the XLR Corporate bond? [2 marks] b. If market interest rates are constant, what will the price of the XLR Corporate bond be in three years? [2 marks] c. If market interest rates rise to 10%, what will the price of the XLR Corporate bond be in three years? [2 marks
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