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Assume you have purchased a 25 year bond with a maturity value of $10,000.The bond pays zero interest for the first three years, then pays
Assume you have purchased a 25 year bond with a maturity value of $10,000.The
bond pays zero interest for the first three years, then pays $1,000 a year for the
next ten years and then pays $3,000 a year for the last 12 years. If you require a
12% return on this investment, how much would you be willing to pay for thisbond?
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