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Assume that a 20-year, 5% annual coupon bond with semiannual payments has a par value of $1,000. Assume the bond can be called at the
Assume that a 20-year, 5% annual coupon bond with semiannual payments has a par value of $1,000. Assume the bond can be called at the ten-year mark (i.e., in 10 years) at a call price of $1,050. The bond currently sells for $950. Employ the excel file to answer the following questions:
- Graph the actual present value (y-axis) against the annual market interest rate (x-axis). Label the y-axis, x-axis, and chart title (7 Points)
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