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Value of a bond: Calculate the value of a bond that matures in 10 years and has a face value of $ 1,000. The annual
Value of a bond: Calculate the value of a bond that matures in 10 years and has a face value of $ 1,000. The annual coupon interest rate is 7%, and the investor requires a 10% rate of return.
A. Calculate the value of the bond at the rate of return of 10%.
B. Calculate the value of the bond if the rate of return is 5%.
C. Calculate the value of the bond if the rate of return is 7%
D. Compare the results in b and c. Explain in terms of the relationship of the bond price and interest rates.
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