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One bond has a face value of $ 1,000 and was issued on July 1, 2008, maturing 20 years. Interest (two coupons) is payable on
One bond has a face value of $ 1,000 and was issued on July 1, 2008, maturing 20 years. Interest (two coupons) is payable on January 1 and July 1 of each year. The annual coupon rate is 13%. An investor wants to buy this bond on June 8, 2011, when the required nominal rate of return is 15% annually. For the purposes of calculating this price, assume that the trade day date (June 8, 2011) is not considered in the calculations of the time the seller held the bond. What price will the investor pay for this bond?
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