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Bond Prices and the Time Value of Money Example 1:What is the expected price of the following bond? (assume par value is $1,000 and interest

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Bond Prices and the Time Value of Money Example 1:What is the expected price of the following bond? (assume par value is $1,000 and interest is paid annually) Bond Coupon (%) Price Time to maturity (yrs) 5 Market discount rate 3% 5% ? What happens if par value is $1? What about $1,000,000? What happens when interest is paid semi-annually? What about monthly? What happens if discount rate declines to 1%? What if it increases to 5%? What happens if time to maturity increases to 10 years? 3

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