Consider the following bond face value 1000 coupon rate 8, Ask an Expert

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Consider the following bond: Face value = $1,000; coupon rate = 8%; yield to maturity = 5%; maturity = 5 years.

a. If interest payments are made semiannually, what is the value of this bond?

b. What is going to happen to the value of this bond as time goes by? Explain why.

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