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How is this solved? Question 2 A 5 year Treasury bond (TBOND 1) is sold onto the market at $100 with an annual coupon of

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Question 2 A 5 year Treasury bond (TBOND 1) is sold onto the market at $100 with an annual coupon of $4. But bad news hits the market such that a new 5 year Treasury bond (TBOND 2) hits the market the following day at an annual coupon of $5. Using the method employed in class (ie do not use the answer given by a financial calculator !) What is an appropriate price to the nearest dollar for TBOND 1 in the secondary market? A) $99 B) $98 C) $97 D) $96 E) $95 Answer D

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