Current market rate for this type and quality of bond

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Reference no: EM131354578

You purchased a 15 year bond at par value when it was initially issued 2 yrs ago. This bond has a coupon rate of 7% and matures 13 yrs from now. If the current market rate for this type and quality of bond is 8.25% than you should expect ---- -

- The bond issuer to increase the amount of all future coupon payments

- The YTM to remain constant due to the fixed coupon rate -today's market price to exceed the par value of the bond.

- to realize a capital loss if you sold the bond at today's market price.

-the current yield today to be less than 7 percent.

Reference no: EM131354578

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