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Consider a bond with a coupon rate of 7% that is paid semi-annually and matures in 1.5 years. The maturity value of the bond is
Consider a bond with a coupon rate of 7% that is paid semi-annually and matures in 1.5 years. The maturity value of the bond is $10,000. Investors require a 10% yield to buy this bond.
a. What is the annual dollar coupon for this bond?
b. What is the cash flow for this bond?
c. What is the price of the bond? (In the calculation use continuous compounding.)
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