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Question# 1 ABC bonds have a 2 0 - year to maturity, $ 1 , 0 0 0 face value, and a 5 % annual

Question#

1

ABC bonds have a

20 -

year to maturity, $

1, 000

face value, and a

5 %

annual coupon rate paid semi

-

annually. Suppose

20 -

year treasury yields are

4.59 % .

ABC's default risk premium is

3 %,

and the Liquidity premium is

0.7 % .

What is the price of the bond? show in excel

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