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Business, 04.10.2019 20:10 Crxymia

Consider the following analysis: the rise and fall of a bond's price has a direct inverse relationship to its yield to maturity, or interest rate. as prices go up, the yield declines and vice versa. for example, a $1 comma 000 bond might carry a stated annual yield, known as the coupon of 7%, meaning that it pays $70 a year to the bondholder. if that bond was bought for $870, the actual yield to maturity would be 8.05% ($70 annual interest on $870 of principal). do you agree with this analysis? briefly explain.

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