Lin has a B rated $30,000 bond with a coupon of 2.5% maturing in 2030 that is currently yielding 3.2%.  This year, the Fed is expected to lower interest rates by 50 basis points.  Explain the effect on the price, yield and cash flow of the bond. (indicate if it will increase or decrease)

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Lin has a B rated $30,000 bond with a coupon of 2.5% maturing in 2030 that is currently yielding 3.2%.  This year, the Fed is expected to lower interest rates by 50 basis points.  Explain the effect on the price, yield and cash flow of the bond. (indicate if it will increase or decrease)

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