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Question 1 A callable 20 year bond which matures for 1000 pays annual coupons of 80. The bond is callable in years 10 through 12

Question 1 A callable 20 year bond which matures for 1000 pays annual coupons of 80. The bond is callable in years 10 through 12 at 1100 and in years 13 through 15 at 1050. The bond is bought to yield 4% annually. Calculate the purchase price of the bond. (a) 1391.99 (b) 1429.45 (c) 1543.61 (d) 1632.72 (e) 1721.83

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