ecent date on the coupon interest rate on BBB rated firms are shown in the table
ID: 2683428 • Letter: E
Question
ecent date on the coupon interest rate on BBB rated firms are shown in the table below. (Assume there are only 5 BBB rated firms)8/1/2009 8/1/2010
Firm 1 15% 12.2%
Firm 2 16.5% 15.0%
Firm 3 16.0% 15.2%
Firm 4 16.2% 14.7%
Firm 5 15.8% 15.8%
Suppose the price of the bond of firm 5 was $700 in 8/1/2009. What happened to the price of the bond of firm 5 in 8/1/2010? (Assume any of the conditions remain the same.)
Question options:
Lower than $700
The same as $700
Higher than $700
Cannot determine
Question 15
Explanation / Answer
The same as $700
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