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delete nsect ome Num LOCK end M return 4. You want to invest money in these two bonds. a) A zero-coupon bond has a face
delete nsect ome Num LOCK end M return 4. You want to invest money in these two bonds. a) A zero-coupon bond has a face value $2,000 and matures in 10 years. The interest rate is 5% compounded monthly. What is the price of this bond? b) Another coupon-bond has a face value of $2,000 and matures in 10 years. The coupon rate is 8% compounded semiannually. What is the price of the bond to yield a true interest rate of 6.5%? c) If you decide to purchase these two bonds (the zero-coupon bond and the coupon-bond above), how much in total you need to pay now? F = P Ul t n ) nt
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