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What is the price of the bond

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Reference no: EM131401567

Avalon Inc. offers a 6 percent coupon bond that has a $1,000 par value, semiannual coupon payments and a yield to maturity of 5.25 percent. The bond matures in 9 years.

  • What is the price of the bond?
  • What will happen to the price if market interest rates rise to 6.45 percent?

Based on your answers, what can you say about the relationship between the price of a bond and the market interest rate? Please show how you arrived at the answers.

Reference no: EM131401567

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