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Sam is considering investing in a bond with a face value of $ 1 0 , 0 0 0 . The bond pays a coupon
Sam is considering investing in a bond with a face value of $ The bond pays a coupon
interest of payable quarterly. If he expects to make a return equal to market interest rate of
per quarter on this investment with a maturity of years, determine the most he can pay for
the bond. Find
i quarterly coupon interest payment amount.
ii i per quarter and n
iii price he can offer for the bond.
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