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Assume that there is a freshly-issued coupon-bearing bond with a face value of 10,000, which has four years to maturity and pays an annual coupon
Assume that there is a freshly-issued coupon-bearing bond with a face value of 10,000, which has four years to maturity and pays an annual coupon rate of 10%. The market prices of zero-coupon bonds with a face value of 100 and different years to maturity are shown below: Time-to-Maturity (in years) 1 2 3 4 Market Price 98.04 94.26 88.90 82.27 The market price of the coupon-bearing bond (rounded to two digits) should be equal to: 11.472.30 12,512.78 11,861.71 12,222.99
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