Market values of the bond at that point in time

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A 20-year 10% annual coupon bond has a par value of $1, 000. When you originally purchased this bond, the effective annual interest rate was 8%. Suppose that five years after purchase, the effective annual interest rate is 10.5%. What is the absolute difference between the book and market values of the bond at that point in time?

Reference no: EM131343875

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