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Sameer bought his Bond from the issuer for $1000 The Coupon rate is 7% the Maturity Period for the Bond is 12 Years; after 3

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Sameer bought his Bond from the issuer for $1000 The Coupon rate is 7% the Maturity Period for the Bond is 12 Years; after 3 Years, Sameer had an emergency that forced him to sell his bond in the market. Samer was very sad because the only offer he received is 850$. Required: if the market interest rate is 10% A) How much is the fair value of Sameer's Bond? 5 marks B) Should he accept the offer, and why? 2 marks c) If the Bond will be sold with the fair value is going to be sold at par or at a discount or at a premium? 1 mark D) How much is the current yield? 2 marks Hints: (use the remaining maturity as the maturity period for the bond, you can use whatever method that suits you, you should show calculation steps) Paragraph Font family Font size U 12 X, X 3

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