What would happen to the bond’s value if inflation fell and declined to 7%? Would we...

What would happen to the bond’s value if inflation fell and declined to 7%? Would we now have a premium or a discount bond? (answer with using the question below)

( question B pertaining to the question above

How is the value of a bond determined? What is the value of a 10-year, $1,000 par value bond with a 10% annual coupon if its required rate of return is 10%?)

Expert Solution

Given,

Par value = $1000

Annual coupon rate (r) = 10% or 0.10

Term (n) = 10 years

jeff jeffy answered 7 months ago

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