What is the coupon rate of the bond

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Reference no: EM131901872

Question : Consider a 2-year bond with coupon payments of $50 and a face value of $1000.

a) What is the coupon rate of the bond?

b) If the interest rate you can earn for similar risk is 3%, what should be the price of the bond?

c) If the interest rate rises to 5%, would the bond price rise or fall? Why?

Reference no: EM131901872

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