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Question 1 8 A 2 5 - year, $ 1 , 0 0 0 par value bond has an 8 . 5 % annual payment

Question

18

25 -

year, $

1, 000

par value bond has an

8.5 %

annual payment coupon. The bond currently sells for $

825 .

If the yield to maturity remains at its current rate, what will the price be

5

years from now?

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