Question: Section 1. Question 5. You own a bond that you purchased 2 years ago at par value, and the bond has 7% semi-annual coupon with

Section 1. Question 5. You own a bond that you purchased

Section 1. Question 5. You own a bond that you purchased 2 years ago at par value, and the bond has 7% semi-annual coupon with 12 year to maturity and the face value of $1,000. Currently the market yield for the type of bond is going at 7.5%, how much money will you make or lose from this investment if you sell? If you have bought another bond with 6 years to maturity, with the same price and coupon rate, would you have made or lost more from the investment if the yield is at 7.5%? Please explain why

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