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(Bond valuation) You are examining three bonds with a par value of $1,000 (you receive $1,000 at maturity) and are concerned with what would happen

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(Bond valuation) You are examining three bonds with a par value of $1,000 (you receive $1,000 at maturity) and are concerned with what would happen to their market vatue if internst rates (or the market discount rate) changed. The three bonds are Bond A-a bond with 5 years left to maturity that has an annual coupon interest rate of 8 percent, but the interest is paid semiannualy. Bond B-a bond with 9 years lett to maturity that has an annual coupon interest rate of 8 percent, but the interest is paid semiannualy. Bond C-a bond With 17 years left to maturity that has an annual coupon interest rate of 8 percent, but the interest is paid semiannually. What would be the value of these bonds it the market discount rate were a. 8 percent per year compounded semiannualiy? b. 3 percent per year compounded semiannualy? c. 14 percent per year conyounded semiannually? d. What observations can you make about these resuts? a. If the market dscount rate were 8 percent per year compounded semiannualy, the vilue of Bond A is : (Round to the noarest cont.)

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