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Show step-by-step solution and solve manually: What is the price of a 10-year bond that pays coupon quarterly at the rate of 4% per annum,

Show step-by-step solution and solve manually:

What is the price of a 10-year bond that pays coupon quarterly at the rate of 4% per annum, if the principal is 1,000,000 pesos and the YTM is 6% compounded quarterly?

Which is higher: the bond price or the principal? Compare the coupon rate and the YTM. Can you establish a general relationship between the bond price and principal (which one is higher) based on the coupon rate and YTM. Explain or derive mathematically.

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