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What happens to the price of a bond with a 5% coupon rate if interest rates for similar bonds go up to 8%? a. The
What happens to the price of a bond with a 5% coupon rate if interest rates for similar bonds go up to 8%?
a. The price decreases because 5% is less than 8%.
b. The price decreases because the present value of future payments falls.
c. The price increases because 8% is more than 5%.
d. The price increases because the present value of future payments rises.
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