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5) Suppose a 15-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading...

5) Suppose a 15-year, $1000 bond with an 8% coupon rate and semiannual coupons is trading for $1374.74.

a. What is the bond’s yield to maturity (expressed as an APR with semiannual compounding)?

b. If the bond’s yield to maturity changes to 4% APR, what will the bond’s price be?

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