Question
A government bond with a face value of $1,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays
A government bond with a face value of $1,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays semi-annual coupon payments of $45, the coupon rate is 9% pa paid twice yearly and rates in the marketplace are 9.6% pa compounded semi-annually. What is the value of the bond today?
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