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Assume you have two bonds outstanding with Face value equal to $1000. The first (Bond A) matures after 8 years and has a coupon
Assume you have two bonds outstanding with Face value equal to $1000. The first (Bond A) matures after 8 years and has a coupon rate of 5.25 percent. The second (Bond B) matures after 10 years and has a coupon rate of 5.25 percent. Note both bonds have same coupon and assume they are of same quality. Interest rates are currently 10%. (Think about why they might be different). Please round your responses to two decimal places. A. What is the price of Bond A given the previous information?
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