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For bonds, assume coupons paid semi-annually, coupon rates and yields quoted with semi-annual compounding, and redeemable at par unless otherwise noted - A manufacturer sells
For bonds, assume coupons paid semi-annually, coupon rates and yields quoted with semi-annual compounding, and redeemable at par unless otherwise noted
- A manufacturer sells a product to a retailer who has the option of either paying X% below the retail price immediately or 20% below the retail price in one year. If the annual effective rate of interest is 7%, find X at which the retailer would be indifferent between the two options.
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