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Nazmi bought a bond for RM1,000 five years ago. That has a 20 year maturity and 12 percent of coupon rate. Now he wishes to
Nazmi bought a bond for RM1,000 five years ago. That has a 20 year maturity and 12 percent of coupon rate. Now he wishes to sell his bond to finance his small business considering the market price is RM900. If the current interest rate is 14 percent per annum, compute the intrinsic value of the bond and determine whether he should sell or remain with the bond until maturity.
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