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Posted on May 18, 2024

Let's say that a 1 0 - year bond was issued 6 years ago, with a nominal value of 1 0 0 0 euros and

Let's say that a

10 -

year bond was issued

6

years ago, with a nominal value of

1000

euros and an interest rate of

4 % .

Given that current interest rate on securities of similar risk to the bond is

6 %,

calculate the economic value of the bond today. It is noted that the coupon payments are made every six months.

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