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Assume you have some money and want to save to amass a given amount at the end of 5 years. One of the options you

Assume you have some money and want to save to amass a given amount at the end of

5

years.

One of the options you have is a

5 -

year,

10 %

coupon bond that is currently selling at par.

Assume that bond is default free.

What will determine the total amount of money you will have at the end of year

5

if you

buy the bond today?

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