Quiz 1 covers chapter 1 and 3

6% coupon rate. In fact you don’t need to calculate. Why? 8. What happens to the price of a three-year bond with an 8% coupon when interest rates change from 8% to 6%? A) A price increase of $53.47 . B) A price decrease of $51.54 . C) A price decrease of $53.47 . D) No change in price. E) None of the above . Answer: A . PV = $80 = $80[16.667 ... ................
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