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Calculate the price of bond using the three percent market

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Reference no: EM132645686

Question (a) A RM1,000 bond matures in 10 years has a coupon rate of 8 percent. Calculate the price of this bond using the following market rate of interest:

i. 3 percent.

ii. 5 percent.

iii. 7 percent.

Question (b) From (a) above what can you tell on the relationship between the coupon rate, the market rate of interest and the price of bond?

Reference no: EM132645686

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