What is the price of the 4-year coupon bond

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A 4-year 5.8% coupon bond is selling to yield 7%. Assume the bond pays interest annually and has a face value of $100.

a) What is the price of the 4-year 5.8% coupon bond selling to yield 7%?

b) What is the price of this bond one year from today in case the yield stayed unchanged at 7%?

c) What is the price of this bond one year from today one year later if in case instead of the yield being unchanged the yield decreases dropped to 6.2% instead?

Reference no: EM132661401

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