A bond promises to pay its owner $500 one year from now. For the following prices, find

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A bond promises to pay its owner $500 one year from now. For the following prices, find the corresponding interest payments and interest rates that the bond offers.

Amount Paid in 1 Year Interest Interest Rate Price Payment $375 $425 $450 $500 $500 $500 $500 $500


As the price of the bond rises, what happens to the bond€™s interest rate?

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Macroeconomics Principles and Applications

ISBN: 978-1111822354

6th edition

Authors: Robert E. Hall, Marc Lieberman

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