Relationship between the coupon rate and discount rate

Reference no: EM131939854

Question: Assuming annual interest payments and a principal value of $100, what is the value of a 5-year 6.2% coupon bond when the discount rate is

i) 4.5%,

ii) 6.2%, and

iii) 7.3%?

Show that your results are consistent with the relationship between the coupon rate, discount rate, and price relative to par value.

Reference no: EM131939854

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