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11. A 10-year government bond with a face value of $ 1,000 pays a coupon of 8% annually. The compounded interest rate is 9%. a)
11. A 10-year government bond with a face value of $ 1,000 pays a coupon of 8% annually. The compounded interest rate is 9%. a) Calculate the present value of the bond. b) Generate a table showing how the bonds present value changes for annually compounded interest rates between 1% and 15%. c) What can you deduce about the relationship between the bond price and the yield to maturity (YTM)?
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