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QUESTION 3: 8 marks A) A 10-year corporate bond pays a 7.5% coupon rate on semiannual basis. What is the bond's price if you know
QUESTION 3: 8 marks A) A 10-year corporate bond pays a 7.5% coupon rate on semiannual basis. What is the bond's price if you know that the required return on this investment is 7% and you will receive the par value (face value) of $ 1000 in the last day of maturity? (6 marks) B) What is your investment decision, if you know the price of your bond in the market (P) equals $ 1000? (2 marks)
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