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. A zero - coupon bond has a par value of $ 1 , 0 0 0 andmatures in 2 0 years. Investors require a

.

A zero

-

coupon bond has a par value of $

1, 000

andmatures in

20

years. Investors require a

10 %

annualreturn on these bonds. For what price should thebond sell?

(

Note: Zero

-

coupon bonds do not pay anyinterest. Review Chapter

3 .)

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