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QUESTION 10 One year ago, Alpha Supply issued 10-year bonds at par. The bonds have a...

QUESTION 10 One year ago, Alpha Supply issued 10-year bonds at par. The bonds have a coupon rate of 7 percent, paid semiannually, and a face value of $1,000. Today, the market yield on these bonds is 5 percent. What is the percentage change in the bond price over the past year? 12.19 percent -12.19 percent 14.35 percent -14.35 percent The bond price did not change.

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Answer #1
We have to use financial calculator to solve for price of the bond
put in calculator for each individual case
1 year ago Today
FV 1000 1000
PMT 1000*7%/2 35 1000*7%/2 35
I 7%/2 3.50% 5%/2 2.50%
N 10*2 20 9*2 18
Compute PV ($1,000.00) ($1,143.53)
Price = $1,000.00 $1,143.53
% change = 143.53/1000 14.35%
ans is option : 14.35%
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