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PART 1 Bond A has the following features: Face value = $1,000, Coupon Rate = 9%, Maturity = 9 years, Yearly coupons The market interest
PART 1
Bond A has the following features:
Face value = $1,000,
Coupon Rate = 9%,
Maturity = 9 years, Yearly coupons
The market interest rate is 5.47%
If interest rates remain at 5.47%, what will the price of bond A be in year 1?
PART 2
Bond B has the following features:
Face value = $1,000,
Coupon Rate = 5%,
Maturity = 7 years, Yearly coupons
The market interest rate is 4.89%
What is todays price of bond B?
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