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1b. Suppose EIN co. issues $1,000 face value, 5 year zero coupon bond. The initial price is $508.35. Using semiannual periods, verify that the

 

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1b. Suppose EIN co. issues $1,000 face value, 5 year zero coupon bond. The initial price is $508.35. Using semiannual periods, verify that the bond yields about 14% to maturity. (Use semiannual periods to be consistent with coupon bonds). - Please Explain and Show Work 1c. Penn & Teller Co. issue 20-year bonds with a coupon rate of 7.6%. The bonds make semi-annual payments. What is the current price of the bonds if the YTM for these bonds is the same as in Problem 2, say 6.4%? - Please Explain and Show Work

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