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1 2 . What is the present value of a $ 1 , 0 0 0 par value 4 0 year bond with an annual

12. What is the present value of a $1,000 par value 40 year bond with an annual coupon rate of 10.00% and semi-annual interest payments? Assume that the current annual market rate is 13%. Show all work. Is the bond selling at a premium or a discount?

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