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From the perspective of someone holding a ten-year bond, which would have a higher net present value: a level coupon bond with a face value
From the perspective of someone holding a ten-year bond, which would have a higher net present value: a level coupon bond with a face value of $1,000 with a 2% annual coupon rate, or a zero-coupon bond with the same face value? Be sure to explain your answer, and assume coupon payments for the level coupon bond start in Year 1 (the bond is purchased in Year 0).
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