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    Bond Pricings

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    Bonds are currently trading with a yield to maturity of 7.5423%. You are trying to sell a bond with a coupon rate of $89. Assuming 6 years remain in the life of the bond:

    a) What is the current market price of your bond?
    b) What is the current market price of your bond if the market rate is 12.8945%?

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    Solution Preview

    a) What is the current market price of your bond?
    For this bond, FV = 1000
    annual coupon payment is PMT = 89
    number of years = 6
    required ...

    Solution Summary

    This solution determines the current market price of the bond, present price of the bond and the new adjusted present value. All steps are shown with formulas.

    $2.49

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