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VFV In reaction to a slowdown in the economy, today the Federal Reserve Bank decided to decrease the Fed Funds rate by 0.25%. Suppose just

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VFV In reaction to a slowdown in the economy, today the Federal Reserve Bank decided to decrease the Fed Funds rate by 0.25%. Suppose just yesterday the Italian shoe company Donisi, Inc., issued bonds at par with par value of $100 million; an annually paid coupon of 5.5%; and 20 years to maturity. Answer the following two questions. 13. Assuming the bond's required rate of return decreased the full 0.25%, how much money did the bond's investors lose/gain due to the interest rate change? a. Lost $250,000.00 (b) Gained $250,000.00 \begin{tabular}{cc} P5.50 & P5.25N \\ & P5.5P5.25P5.5 \\ \hline \end{tabular} pmt=250,000 N=20 c. Lost $3,050,555.65 FV=100,000,000

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