Question: Consider a corporate bond with 25 years maturity. The par value of bond is $1,000 and annual coupon rate is 7%. This is a semiannual

Consider a corporate bond with 25 years maturity. The par value

Consider a corporate bond with 25 years maturity. The par value of bond is $1,000 and annual coupon rate is 7%. This is a semiannual coupon bond, so the coupons are paid in every 6 months.

a. Complete the following table based on information above.

b. Draw a graph showing interest rates on horizontal axis and bond price on vertical axis. What is the relationship between interest rates and bond prices that you see?

4. Consider a corporate bond with 25 years maturity. The par value of bond is $1,000 and annual coupon rate is 7%. This is a semiannual coupon bond, so the coupons are paid in every 6 months. a. Complete the following table based on information above. (5 points) (Note that you have to convert annual interest rate to semiannual while calculating bond price) b. Draw a graph showing interest rates on horizontal axis and bond price on vertical axis. What is the relationship between interest rates and bond prices that you see? (5 points)

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