Find the relation between coupon rates and present values

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Question: Repeat parts (a) through (c) of Problem 11 using a required rate of return on the bond of 8 percent. What do your calculations imply about the relation between the coupon rates and bond price volatility? ( LG 3-5 )

Problem: Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $1,000, have 12 years remaining to maturity, and have a required rate of return of 10 percent. ( LG 3-5 )

a. The bond has a 6 percent coupon rate.

b. The bond has a 8 percent coupon rate.

c. The bond has a 10 percent coupon rate.

d. What do your answers to parts (a) through (c) say about the relation between coupon rates and present values?

Reference no: EM131632277

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