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Bond A has the following terms: Coupon rate of interest (paid annually): 10 percent Principal: $1,000 Term to maturity: Seven years Bond B has the
Bond A has the following terms: Coupon rate of interest (paid annually): 10 percent Principal: $1,000 Term to maturity: Seven years Bond B has the following terms: Coupon rate of interest (paid annually): 5 percent Principal: $1,000 . Term to maturity: Seven years a. What should be the price of each bond if interest rate is 10 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $ b. What will be the price of each bond if, after three years have elapsed, interest rate is 10 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $ c. What will be the price of each bond if, after seven years have elapsed, interest rate is 8 percent? Use Appendix B and Appendix D to answer the question. Round your answers to the nearest dollar. Price of bond A: $ Price of bond B: $
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