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A bond was issued on 1 January 2019 with 6% coupon rate (annual coupon payment) and $5,000 face value. The required return rate for the
A bond was issued on 1 January 2019 with 6% coupon rate (annual coupon payment) and $5,000 face value. The required return rate for the bond is at 4%, and it would be matured on 31 December 2026.
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a) If you trade on 22 October 2019, what is the amount of the accrued interest? (6 marks)
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b) If you buy the bond on 22 Oct 2019, how much do you pay? (6 marks)
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