Suppose you purchase a 3-year 5 percent coupon bond with


Suppose you purchase a 3-year, 5 percent coupon bond with face value $100 at par and hold it for two years. During that time,the interest rate falls to 4 percent.

a) What is the price of the bond when you bought it?

b) What is the price of the bond two years after the purchase?

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Business Economics: Suppose you purchase a 3-year 5 percent coupon bond with
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