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This is a six year bond. Coupons are paid once a year. The principal is 120 . The coupon rate is 5%. The discount rate
This is a six year bond. Coupons are paid once a year. The principal is 120 . The coupon rate is 5%. The discount rate is 6%. In your answer provide a brief definition of a bond using the above numerical information and the rationale for your calculations (and equation). Show all work. Do not plagiarize. A) Obtain the price (today) of the bond assuming it is a straight bond (up to two decimal places). B) Obtain the price (today) of the bond assuming it is a zero coupon bond (up to two decimal places)
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