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    Price of Bond

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    One year ago a $1000 face value 6% coupon bond was selling for $918.93. since then, the market return decreased by two percentage points. the bond pays interest semi-annually and now has four years to maturity. the bonds price today is?

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    Solution Preview

    We first find the interest rate one year ago. At that time the periods till maturity were 5X2=10 (5years and semi annual). Interest amount is $30 per period, face ...

    Solution Summary

    The solution explains how to determine the price of bond today.