A 4-year 5.8% coupon bond is selling to yield 8%. The bond pays interest annually....
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A 4-year 5.8% coupon bond is selling to yield 8%. The bond pays interest annually. One year later interest rates decrease from 8% to 7.2%. (a) What is the price of the 4-year 5.8% coupon bond selling to yield 8%? (b) What is the price of this bond one year later assuming the yield is unchanged at 8%? (c) What is the price of this bond one year later if instead of the yield being unchanged the yield decreases to 7.2%
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