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Question 3: 10 marks You bought a 5-year annual payment corporate bond with a market price of $1000. The bond pays annual interest of $100,

Question 3: 10 marks

You bought a 5-year annual payment corporate bond with a market price of $1000. The bond pays annual interest of $100, by how much your bond is mispriced if: -

  1. The required rate of return on your investment is 10% ? (5 marks)
  2. The required rate of return on your investment is 12% ? (5 marks)

This question is worth too many marks please answer it in details thanks

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