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Consider a three-year bond with face value F=1000 and a coupon rate c=12% paid semi- annually. Suppose you bought the bond from this investor at
Consider a three-year bond with face value F=1000 and a coupon rate c=12% paid semi- annually. Suppose you bought the bond from this investor at the end of year 2. How much would you pay for this bond if the market interest rate is 5% ? Keep your answer to four decimal places, i.e., write 3.579% as 0.0358
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