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Consider a bond with face value F = 100 dollars maturing in five years with coupons of C = 12 dollars paid annually, the last
Consider a bond with face value F = 100 dollars maturing in five years with coupons of C = 12 dollars paid annually, the last one at maturity. Suppose that the continuous compounding rate is r = 8%. Sketch the graph of the price of the coupon bond as a function of time.
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