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A one-year, $1000 par value corporate bond has a coupon rate of 10% (paid semiannually). The real rate of interest is 1%, This year's inflation
A one-year, $1000 par value corporate bond has a coupon rate of 10% (paid semiannually). The real rate of interest is 1%, This year's inflation rate was 7% and it is expected to increase to 8% over the coming year. The default risk premium on similar corporate bonds is 3%. What is the bond's fair present value (FPV)? None of the above. 5981.67 $901.80 $1,000
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