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4 marks Suppose Air Emirates sold an issue of bonds that mature in 8-years. The face value of the bond is Dhs. 1,000. The bond

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4 marks Suppose Air Emirates sold an issue of bonds that mature in 8-years. The face value of the bond is Dhs. 1,000. The bond pays a coupon rate of 10% per annum. Coupons are paid semi-annually and the interest rate is 6% per annum. a) What is the price of the bond? 2 marks b) Discuss the relationship between the price of the bond (PV) and the interest rates. 2 marks

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