Bond Price
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An investor purchases a $1,000 par value bond that pays $60 interest each six-month period and has 8 years to maturity. The investor plans to hold the bond for 5 years and sell it in the market. The current required rate of return in the market is 14%, but is expected to drop to just 10% at the time of the sale due to projected falling interest rates. The price the investor is willing to pay for this bind is what?
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Education
- BE, Bangalore University, India
- MS, University of Wisconsin-Madison
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