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1. Exercise One: A constant growth annuity offers a coupon of $100,000 at the end of the first year. The instrument has a duration of

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1. Exercise One: A constant growth annuity offers a coupon of $100,000 at the end of the first year. The instrument has a duration of 20 years, and coupons are received on a semiannual basis. (a) If the market rate is 9.75%, and the growth rate is 2%, what is the present value of this annuity? (b) If the market rate changes to 11.25% (all things being equal), how does that affect your present value

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