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An Admiralty Bond promises a payment of $50/year, forever. Assuming the first payment is expected one year from today and that an appropriate yield is
An Admiralty Bond promises a payment of $50/year, forever. Assuming the first payment is expected one year from today and that an appropriate yield is 5%, what is a fair price for this bond? Alternatively, assume that the first payment is expected immediately. How does the price of this bond change?
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To calculate the fair price of the Admiralty Bond we can use the concept of the present value of an ...
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Practical Management Science
Authors: Wayne L. Winston, Christian Albright
5th Edition
1305631540, 1305631544, 1305250907, 978-1305250901
