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Florida Investment Fund buys 90 bonds of the Gator Corp through a broker. The bonds pay 8% annual interest. The yield to maturity is 10%. The bonds have a 25-year maturity.
Using the assumption of semiannual interest payments:
a. compute the price of a bond
b. compute the total value of the 90 bonds.
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a) The coupon rate is 8% annual. We have two type of cash flow. First the annual payments of 80 towards interest and ...
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