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A municipal bond with a par value of $1,000 and a maturity of 8 years has a coupon rate of 7% paid annually and the
A municipal bond with a par value of $1,000 and a maturity of 8 years has a coupon rate of 7% paid annually and the required rate of return for investors is only 4%.
a) Calculate the bond value.
b) Does the bond sell at par, premium, or discount? Why?
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