Question: All bonds have a $1,000 face or par value unless otherwise stated. k c is the coupon rate and k d is the market cost

All bonds have a $1,000 face or par value unless otherwise stated. kc is the coupon rate and kdis the market cost of debt.

  1. Value a bond with 10yrs to maturity. Its par value is 1000, annual coupon is 10% and the applicable interest rate is 10%. What will happen to the bond price if rates rise to 13% or go down to 7%.

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