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What happens to the bond price

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Reference no: EM132753605

Suppose a 10-year bond is issued with an annual coupon rate of 8 percent when the market rate of interest is also 8 percent. If the market rate rises to 9 percent, what happens to the price of this bond?

What happens to the bond's price if the market rate falls to 6 percent? Explain why?

Reference no: EM132753605

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