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Fernanda owns an 8%, $10,000 bond with 3 years remaining to maturity. The bond pays interest semi-annually. The yield on new 3-year issues of the
Fernanda owns an 8%, $10,000 bond with 3 years remaining to maturity. The bond pays interest semi-annually. The yield on new 3-year issues of the same quality is 6%. Fernanda does not want to sell her bond. She understands that bond interest payments are a sort of annuity and she is wondering what the present value of her bond interest payments will be over the remaining three years?
A) $1,800.00
B) $2,138.41
C) $2,166.88
D) $2,400.00
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