How does the demand for bonds vary with the price of bonds

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Reference no: EM13207736

Consider a bond that promises to pay $100 in one year.
a. What is the interest rate on the bond if its price today is $75? $85? $95?
b. What is the relation between the price of the bond and the interest rate?
c. If the interest rate is 8%, what is the price of the bond today?
d. How does the demand for bonds vary with the price of bonds?

Reference no: EM13207736

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