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Now, consider the situation in which Sophia wants to earn a return of 12% on a $1,000 par value bond, but the bond being considered
Now, consider the situation in which Sophia wants to earn a return of 12% on a $1,000 par value bond, but the bond being considered for purchase offers a coupon rate of 9%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bond's intrinsic value to the nearest whole dollar, then its intrinsic value of ___ is ___ its par value, so that the bond is trading at ___.
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