Question: you are purchasing a 20-year bond that has a 4 percent coupon and pays semiannually. Interest rates rise to 5.5 percent for other bonds with

you are purchasing a 20-year bond that has a 4 percent coupon and pays semiannually. Interest rates rise to 5.5 percent for other bonds with the same maturity and credit quality due to inflation expectations based on better than expected economic growth in the latest quarter. Calculate the price of the bond. Should you purchase the bond if the price was $920.11?

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