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If the interest rate is 8%, what is the present value of a security that pays you $1,000 next year, $1,500 two years from now
If the interest rate is 8%, what is the present value of a security that pays you $1,000 next year, $1,500 two years from now and $2,000 three year from now? If this security sold for $4,000, is the yield to maturity greater or less than 8%? Explain why? (10 marks)
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