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A $ 5,000 bond with a coupon rate of 5.8% paid semiannually has tenten years to...

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Finance

A $ 5,000 bond with a coupon rate of 5.8% paid semiannually hastenten years to maturity and a yield to maturity of 7%. If interestrates rise and the yield to maturity increases to 7.3%, what willhappen to the price of the? bond?

Answer & Explanation Solved by verified expert
4.3 Ratings (714 Votes)
Step 1 Calculate Bond Price if YTM is 7 The bond price can be calculated with the use of Present Value PV functionformula of EXCELFinancial Calculator The functionformula for PV is PVRateNperPMTFV where    See Answer
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Transcribed Image Text

A $ 5,000 bond with a coupon rate of 5.8% paid semiannually hastenten years to maturity and a yield to maturity of 7%. If interestrates rise and the yield to maturity increases to 7.3%, what willhappen to the price of the? bond?

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