A 5-year maturity 6 coupon rate bond is selling to yield 8, Ask an Expert

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A 5-year maturity 6% coupon rate bond is selling to yield 8%. The bond pays interest semi-annually. One year later, interest rates decrease from 8% to 5%.

1) What is the current price of the 5-year maturity 6% coupon bond selling to yield 8%?

2) What is the price of this bond one year later assuming the yield is unchanged at 8%?

3) What is the price of this bond one year later if the yield decreases to 5%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91416837

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