Given a five-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually,
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Given a five-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually, determine its values given it is trading at the following yields: 8%, 6%, and 10%. Comment on the price and yield relation you observe.
What are the percentage changes in value when the yield goes from 8% to 6%
and when it goes from 8% to 10%?
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