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You own a 25-year maturity bond that you purchased 5 years ago. The bond pays $90 in annual interest, with a $1,000 par value. Your
You own a 25-year maturity bond that you purchased 5 years ago. The bond pays $90 in annual interest, with a $1,000 par value. Your required rate of return is 6 percent. How much is the value of this bond today? (Show calculation) How does the value change if your required rate of return increases to 9 percent? (Avoid any calculations for answering this part)
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