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Valuing zero coupon bonds A government issues a savings bond that will pay the holder $1,000 in 10 years. (This is called a zero coupon

Valuing zero coupon bonds A government issues a savings bond that will pay the holder $1,000 in 10 years. (This is called a zero coupon bond.) If the bond market is now requiring 5% annual interest on government debt, what will be the issue price (present value) of this bond?

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