Question: Suppose Kelloggs issues a bond today with a $1000 face value and a coupon rate of 8%. If the bond has a life of 15

Suppose Kelloggs issues a bond today with a $1000 face value and a coupon rate of 8%. If the bond has a life of 15 years, makes coupon payment semiannually and has a yield to maturity of 9%, what will the bond sell for today? Suppose one year after the bonds are issued, interest rates fall from 9% to 8%. What will happen to the price of the bond?

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