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    Value of a Bond with Coupon Payment

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    Consider a bond with a face value of $1000. The coupon payment is made semiannually and the yield on the bond is 12% (effective annual yield). How much would you pay for the bond if:
    a. The coupon rate is 8% and the remaining time to maturity is 20 years?
    b. The coupon rate is 10% and the remaining time to maturity is 15 years?

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    Solution Preview

    Please see the attached file.

    Consider a bond with a face value of $1000. The coupon payment is made semiannually and the yield on the bond is 12% (effective annual yield). How much would you pay for the bond if:
    a. The coupon rate is 8% and the remaining time to maturity is 20 years?
    b. The coupon rate is 10% and the ...

    Solution Summary

    The solution attaches a Word file with a two-part bond value question answered

    $2.19

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