A bond has a $1000 face value, ten years to maturity, and 7% semiannual coupon payments. What would be the expected difference in this bond's price immediately before and immediately after the next coupon payment?

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The bond pays a 7% annual coupon, which is $70 per year. Since the bond pays semiannual coupons, each payment is $35. The bond's price will drop by the amount of the coupon payment immediately after the coupon is paid, which is $35.

A Bond Has a $1000 Face Value, Ten Years to Maturity