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Suppose you and the banker agree on a specific bond structure, and now your role is to sell these bonds to investors. You have a
Suppose you and the banker agree on a specific bond structure, and now your role is to sell these bonds to investors. You have a friend who can invest but is not sure what kind of cashflows they would get and how the bonds value will change with changes in interest rates. Please calculate the bond's intrinsic value for your friend and make him understand the effects of changes in interested rates on the value of his bonds.
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