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1.Find the value of a 10-year bond with a coupon rate of 8% and the required rate of 10%.Par value equals$1,000. 2.Find the value of
1.Find the value of a 10-year bond with a coupon rate of 8% and the required rate of 10%.Par value equals$1,000.
2.Find the value of the above bond assuming interest is paid every quarter.
Bonus
If a perpetual bond pays you $100 annually and the required rate is 5%, what is the value of this bond?
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