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Primary Investments is issuing a six (6) year 8% Coupon Bond that has a face value of $1,000. The investors required rate of return is10%
Primary Investments is issuing a six (6) year 8% Coupon Bond that has a face value of $1,000. The investors required rate of return is10%
i. If the coupons are paid annually, what is the expected price of this Bond today?
ii. How will the price of the Bond change if the coupons are paid every three months?
iii. What is the effect of frequency of coupon payments on Bond prices?
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