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The value, or price, of a bond changes inversely with the direction of interest rates. At the stated coupon rate of 7.000% the bond you described is worth $10,000.00, same as the face amount. However, calculated at the current market rate of 0.000% your bond would be valued at $31,000.00, and at your desired yield of 9.000% your bond would be valued at $7,936.20.
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Jul 8th, 2015
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