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1. Assume the following information for a given corporate step-up bond: Par = $1000 Current, YTM: 4.85%, Maturity = 20 years, Assigned interest rates: Years

1. Assume the following information for a given corporate step-up bond:

Par = $1000 Current, YTM: 4.85%, Maturity = 20 years,

Assigned interest rates: Years 1-7: 4.25%, Years 8-15: 5.10%, Years 16-20: 5.55%

If this bond pays annual coupon payments, what is this bond's current price (NPV)?

The answer is $991.72, does anyone can teach me how to get this number? Thanks!

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