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A 10-year bond was issued at par on 1 July 2017. The bond has a face value of $1,000 and pays annual coupons at 4%
A 10-year bond was issued at par on 1 July 2017. The bond has a face value of $1,000 and pays annual coupons at 4% p.a. Jenny purchased the bond on its issue date and sold it to Emma on 1 July 2019 immediately after the coupon payment. Emma paid a price that gave her a yield of maturity of 3% p.a. Which of the following can be used to find the price Emma paid for this bond (only one correct answer)? a. Select one: 40 1000 (1 1.03-2) + 0.03 1.032 40 1000 b. * (1 1.04-8) + 0.04 1.048 40 1000 * (1 1.03-8) + 0.03 1.038 d. None of the options give the price Emma paid. 1000 1000 (1 1.03-10) + 0.03 1.0310 40 1000 *(1 1.03-10) + 0.03 1.0310 e
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