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Use the bond term's below to answer the question Maturity 6 years Coupon Rate 3% Face...

Use the bond term's below to answer the question
Maturity 6 years
Coupon Rate 3%
Face value $1,000
Annual Coupons
When you buy the bond the interest rate is 4%

Right after you buy the bond, the interest rate changes from 4.00% to 2.75% and remains there.

What is the price effect in year 5 ?

  

$9.93

   

$13.22

   

$10.93

   

$12.57

$12.02

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Expert Solution

jeff jeffy answered 1 year ago
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