Question: Repeat parts a through c of Problem using a required

Repeat parts (a) through (c) of Problem using a required rate of return on the bond of 8 percent. What do your calculations imply about the relation between the coupon rates and bond price volatility?
In Problem, Calculate the fair present values of the following bonds, all of which pay interest semiannually, have a face value of $ 1,000, have 12 years remaining to maturity, and have a required rate of return of 10 percent.
a. The bond has a 6 percent coupon rate.
b. The bond has a 8 percent coupon rate.
c. The bond has a 10 percent coupon rate.

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  • CreatedJanuary 27, 2015
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