Problem 3-01, What happens if interest rates increase or decrease?

Principles of Corporate Finance

Brealey, Myers, and Allen

13th Edition

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Determine what happens to the coupon rate, the bond price, and the yield to maturity if interest rates increase shortly after the bond is issued. Conversely, what happens if interest rates decrease shortly after the bond is issued?

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  • Search Terms: $ $,, -year a after and bond bond’s a. coupon face happens if increase interest is issued issued, maturity? of paying price? c. prices rate? b. rates shortly the to value what with year. yield yields*
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