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4.1.4 A 6% bond maturing in 8 years with semiannual coupons to yield 5% convertible semiannually is to be replaced by a 5.5% bond yielding

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4.1.4 A 6% bond maturing in 8 years with semiannual coupons to yield 5% convertible semiannually is to be replaced by a 5.5% bond yielding the same return. In how many years should the new bond mature? (Both bonds have the same price, yield rate and face amount) Bond 1 Bonda n=16 r= .0275 j-.025 = 03 j= .025 ne number of periode. P = Fulb .. PeP2 P=F&j + Franj 2025 + F1.03) a Tl.o25 PEFUMS + F(-0275) a 71.025 Foto+F1.03) a 101.028= Fun F1-02) n= ? ll

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