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    Managerial Finance 476 (II)

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    Discussion Question 1:
    What impact do changing interest rates have on the price of long-term vs. short –terms bonds? What do you think is happening in the bonds market today? What impact, if any does, does the stock market have on the bond market?

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    Solution Preview

    - The interest rate that is printed on the bond is rarely the same as the market rate when it is issued.
    <br>- Lets say the bond is printed at 10% but the market rate is 8% then the price of the bind will bond will be issued at a premium to compensate for the rate
    <br> - If the bond is printed at 10% but ...