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Suppose that a 3 0 - year government bond has a maturity value of $ 1 0 0 0 and a coupon rate of 5

Suppose that a

30 -

year government bond has a maturity value of $

1000

and a coupon rate of

5 %,

with coupons paid semiannually. Find the market price of the

bond if the yield rate is

4 %

compounded semiannually.

(

Round your answer to the nearest cent.

)

Is this bond selling at a discount or at a premium?

discount

premium

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