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An investor purchased a bond for $1,038.90 exactly two years ago. At that time, the bond had a maturity of five years and a coupon
An investor purchased a bond for $1,038.90 exactly two years ago. At that time, the bond had a maturity of five years and a coupon rate of 10% (paid semiannually). Assuming the rates below are the prevailing rates for this type of bond at different maturities, calculate the price that the investor could sell her bond for today.
Maturities | 1 year | 3 years | 5 years | 10 years | 30 years |
Interest rates | 6% | 7% | 8.5% | 10% | 12% |
1060.08 1079.93 1038.31 1078.73
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