Question: A 1 0 - year bond has a face value of $ 1 , 0 0 0 with a 5 % per annum coupon rate.

A 10-year bond has a face value of $1,000 with a 5% per annum coupon rate. The bond pays coupons semi-annually. The current yield to maturity of the bond is 4% per annum. After 5 years, the yield to maturity of the bond is predicted to increase to 6% per annum, what would be the value of the bond in Year 5?

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