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An investor has two bonds in his portfolio that have the face value of $1000 and pay a 10% annual coupon. Bond L matures in
An investor has two bonds in his portfolio that have the face value of $1000 and pay a 10% annual coupon. Bond L matures in 15 years and Bond S matures in 1 year
(a). what will the value of each bond be if getting interest rate is 5%, 8%, and 12%. Assume that only one more interest payment is to be made on Bond S at its maturity and that 15 more payments are to be made on bond L.
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