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Let's denote the price of a nonmaturing bond(called aconsol) as Pb. The equation that indicates this price is Pb=Ir, where I is the annual net

Let's denote the price of a nonmaturing bond(called aconsol) as Pb. The equation that indicates this price is Pb=Ir, where I is the annual net income the bond generates and r is the nominal market interest rate.

a. Suppose that a bond promises the holder $400 per year forever. The nominal market interest rate is 6 percent. Calculate thebond's currentprice: $ (TBD). (Round your answer to the nearest wholedollar.)

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