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A $1,500 par value 4% bond with semiannual coupons is callal seven years afer ssue. Te bond atr o 0 0 th endfien years and
A $1,500 par value 4% bond with semiannual coupons is callal seven years afer ssue. Te bond atr o 0 0 th endfien years and isold to yield a ominal rate of 3 percent compounded semiannually, calculated under the assumption that the bond will not be called, and is redeemed at matrity. Please determine the call premium at the nd of seven years, that would yield the purchaser the same nominal rate of 3% compounded semiannually if the bond is, in fact, called at the end of seven years
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