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3. You have just noticed in the financial pages of the local newspaper that you can buy a $1,000-par bond for $800. The coupon rate

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3. You have just noticed in the financial pages of the local newspaper that you can buy a $1,000-par bond for $800. The coupon rate is 6% and there are 10 years to maturity. Interest is paid semi- annually. a. If the going rate of interest is 8%, what is the value of this bond? (5 pts.) b. Should you make the purchase? Why? (2 pts.)

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