What is the price of the bond and yield to maturity

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Assume a $100 face value of abond with a cupon rate of 4%/ yr. and 8 years remainning to maturity. The prevailing interest rate is %10 .

(a) what is the price of the bond?

(b) Assume the bond is selling at $63. Whats the yield to maturity?

(c) does a change in interest rate have any effect on the bond price ? Explain what the effect is , if any , and why?

Reference no: EM131458052

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