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4. A $100 par value 8-year annual-coupon bond is redeemable at 105%. The coupon rate is 3% in the first 4 years and increases to
4. A $100 par value 8-year annual-coupon bond is redeemable at 105%. The coupon rate is 3% in the first 4 years and increases to 5% afterwards. Construct the amortization schedule for the bond in the 4th, 5th and 6th year, given that the price of the bond is $96.3. Hint: Use Excel solver to compute the yield. Then calculate the book value after the third coupon.]
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