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A bond has a par value of $1,000, 7 years to maturity, and a coupon rate of 3.35%? Assume that coupon payments are made semiannually.

a. If the required rate of return is 3.50%, what is the value of the bond? (Round answers to 2 decimal places.)

Bond value            $

b. What is the bond’s value if the required rate of return increases to 5.65%? (Round answers to 2 decimal places.)

Bond value            $

c. What is the bond’s value if the required rate decreases to 3.65%? (Round answers to 2 decimal places.)

Bond value            $

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92714930

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