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British government 3.5% perpetuities pay 3.5 interest at the end of each year forever. Another bond, 2.0% perpetuities, pays 2.00 a year forever. a. What

British government 3.5% perpetuities pay 3.5 interest at the end of each year forever. Another bond, 2.0% perpetuities, pays 2.00 a year forever.

a. What is the value of 3.5% perpetuities if the long-term interest rate is 5.5%? (Round your answer to 2 decimal places.)

Perpetuity value

b. What is the value of 2.00% perpetuities? (Round your answer to 2 decimal places.)

Perpetuity value

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