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    Cash Flow from a Bond

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    You are considering buying a U.S. government bond with the face value of $1000. The bond pays an annual coupon payment of $80 and it matures in 5 years. The bonds coupon rate is 8%. What are the cash flows associated with owning this bond for each year?

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    Solution Preview

    Year Cash flow
    0 -Price of the bond ( cannot be calculated ...

    Solution Summary

    Identifies Cash Flow from a Bond

    $2.19

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