Determine the return on coupon bond

Reference no: EM1362974

1. What is the return on a 5 % coupon bond that initially sells for $1,000 and sells for $900 one year later?

2. The duration of a ten-year, 10% coupon bond when the interest rate is 10% is 6.76 years. What happens to the price of the bond if the interest rate falls to 8%?

Reference no: EM1362974

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