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Question 6 (a) Calculate the price of a 5 year corporate bond with a face value of $1,000 and a yield to maturity of 6%.

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Question 6 (a) Calculate the price of a 5 year corporate bond with a face value of $1,000 and a yield to maturity of 6%. The bond has no coupon payments. Calculate the price of this bond. [3 marks] (b) If the company wants to raise $10,000,000, how many bonds does it have to sell? [2 marks] 1 A B I jii III C

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