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You own a bond that has a 7% coupon and matures in 12 years. You purchased this bond at par value when it was originally
You own a bond that has a 7% coupon and matures in 12 years. You purchased this bond at par value when it was originally issued. If the market interest rate increases to 7.5%, and you decide to sell the bonds, then you would expect: Select one: a. there will be no change in price b. the bond price to increase and you will realize a capital loss. c. the bond price to decrease and you will realize a capital loss. d. the bond price to decrease and you will realize a capital gain. e. the bond price to increase and you will realize a capital gain.
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