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2. A government bond with face value $1,000 matures next year. This means that next year the government will send the bond holder a $1,000

2. A government bond with face value $1,000 matures next year. This means that next year the government will send the bond holder a $1,000 cheque (the bond is not worth anything afterwards). If the interest rate is 2.8%, what is the bond’s market price today? Explain.

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