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A 5% bond with semiannual coupons was purchased 10 years prior to the published redemption date at a price to yield 7%, convertible simmiannually. The
A 5% bond with semiannual coupons was purchased 10 years prior to the published redemption date at a price to yield 7%, convertible simmiannually. The bond has a par value of $1,000. Exactly 421 years after the date of purchase, it is announced that the bond will be redeemed 2 years prior to the published redemption date. The new yield to maturity is found to be 8% convertible semiannually. Find XY, where: - X is the amount by which the principal will be adjusted during the first half of the sixth year on the new basis - Y is the amount by which the principal would have been adjusted during the first half of the sixth year on the old basis
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