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Mary Goldsmith's broker has shown him two bonds. Each has a maturity of 7 years, a par value of $1,000, and a yield to maturity

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Mary Goldsmith's broker has shown him two bonds. Each has a maturity of 7 years, a par value of $1,000, and a yield to maturity of 8%. Bond A has a coupon interest rate of 10% paid annually. Bond E has a coupon interest rate of 5% paid annually. i. Calculate the selling price for each of the bonds. (5 marks) ii. Assume that Mary will reinvest the coupon payments as they are paid (at the end of each year) and that his rate of return on the reinvestment is only 6%. For each bond, calculate the value of the principal payment plus the value of Mary's reinvestment account at the end of the 7 years. (4 marks)

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