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A portfolio manager buys $20 million par value of a 15-year bond that promises to pay 10% interest ratio per year. The reinvestment rate per

A portfolio manager buys $20 million par value of a 15-year bond that promises to pay 10% interest ratio per year. The reinvestment rate per period is 8%.

  1. Is $20 million the price of the bond? Explain.
  2. What is the ROR of the bond?
  3. What will be the market price of the bond at the 8% yield?

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