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Suppose you buy ADA Co. bonds today with a par value of $1000 and a current market value of $768.00, having 10% yield to maturity.
Suppose you buy ADA Co. bonds today with a par value of $1000 and a current market value of $768.00, having 10% yield to maturity. The bonds mature in 5 years and interest is paid annually. One year from now, when the yield to maturity is 12%, you sell the bond. Answer the following question based on the above information. The present value of the $1000 to be returned in 5 years is ________ and the present value of all coupon payments is _______
A: $620.92 and $147.08
B: $620.92 and $379.08
C: $768.00 and $232.00
D: None of the above
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