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Question 4 A 30-year puttable bond with a coupon of 4% is trading at 130 in the marketplace. The issuer is Intel. Intel also has
Question 4 A 30-year puttable bond with a coupon of 4% is trading at 130 in the marketplace. The issuer is Intel. Intel also has a 30-year 4% traditional bond trading at 110 in the marketplace. Does the issuer or the investor own the option on the debt? Why? What is the option worth? (Logic question. No calculator needed) Question 4 A 30-year puttable bond with a coupon of 4% is trading at 130 in the marketplace. The issuer is Intel. Intel also has a 30-year 4% traditional bond trading at 110 in the marketplace. Does the issuer or the investor own the option on the debt? Why? What is the option worth? (Logic question. No calculator needed)
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