FIGURE 5-1 Time Line for MicroDrive Inc.’s Bonds, 10% ...

Time Path of Bond Value When rd = Coupon Rate = 10% (Par Bond) Bond Value ($) Time Path of 10% Coupon Bond’s Value When rd Falls to 5% and Remains There (Premium Bond) Time Path of 10% Coupon Bond’s Value When rd Rises to 15% and Remains There (Discount Bond) FIGURE 5-2 Time Path of the Value of a 10% Coupon, $1,000 Par Value Bond When Interest ................
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