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Problem 2 You have the following bond maturing in 4 years: Face Value = 1.000$; Semiannual dividends = 35$; Annual Interest rate= 5% 1. Compute
Problem 2
You have the following bond maturing in 4 years:
Face Value = 1.000$;
Semiannual dividends = 35$;
Annual Interest rate= 5%
1. Compute the PV of the cash flows?
2. What will happen to the bond price if the interest rate decreases to 6%?
3. What will be the price if the annual interest is 4%?
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Handbook Of Research In Education Finance And Policy
Authors: Helen F. Ladd, Margaret E. Goertz
2nd Edition
0415838010, 978-0415838016
