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9 May, 20:45

An investor purchases a company's bond from two years ago with a lower coupon rate than this year's bond. Why would the investor want to buy a lower-interest bond in the secondary market?

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  1. 9 May, 22:35
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    This investor would want to buy a lower interest bond in the secondary market because of the opportunity to negotiate a lower par value to offset the lower interest rate.

    If there is a lower value, there is a lower interest rate, which is what this investor is interested in.
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