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    Present Value of Bond Calculation

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    Given a 5 year instrument with a face value amount of $1000 an annual interest rate of 9%, with semiannual interest payments and repayment at the end of 5 years, set up the calculation of the PV of cash flows at 11% yield. Would the value of this note be greater than, less than or equal to $1000? Why?
    **Please write out formula manually or attach versus excel calculation.

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    The present value is less than face value because the market ...

    Solution Summary

    The solution computes present value of bond with semi-annual payments in an excel spreadsheet.