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Posted on May 19, 2024

If the interest rate is 5%, what is the present value of a security that pays you $1, 050 next year and $1,102.50 two years

If the interest rate is 5%, what is the present value of a security that pays you $1, 050 next year and $1,102.50 two years from now? If this security sold for $2,200, is the yield to maturity greater or less than 5%? Why?

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