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Consider a bond with the following characteristics. Par: $1,000Two coupon payments per year (i.e., coupons are paid semi-annually)Coupon rate: 7.50% Years to maturity: 40 Bond price: $965 Supposethat the annual market interest rate for this bond drops by 1%.What is the new bond price? Note: recall that the annualyield-to-maturity (YTM) is the market interest rate on the bond.$965.00 $858.33 $1,097.93
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