A $1,000 bond has a coupon rate of 4 percent and matures after ten years.
a) What is the current price of the bond if the comparable rate of interest is 4 percent?
b) What is the current prices of the bond if the comparable rate of interest is 6 percent?
c) What are some current yields give the prices determined in parts (a) and (b)?
d) Why are the prices in (a) and (b) and the current yields in (c) different?
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