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Question 19 $1000 Debenture Face Value Coupon Rate 35% probability that rates will fall to 11% 65% probability that rates will increase to 14% Par

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Question 19 $1000 Debenture Face Value Coupon Rate 35% probability that rates will fall to 11% 65% probability that rates will increase to 14% Par value 12% $980 a) Calculate the Market Price of the Non-Callable Debenture b) What would the coupon rate need to be for the debentures to sell at par? Calculate the cost of the call provision c)

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