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Working as an investment analyst for a fund that invests in fixed-income assets, you are tasked with evaluating the efficacy of a potential investment. You
Working as an investment analyst for a fund that invests in fixed-income assets, you are tasked with evaluating the efficacy of a potential investment. You are given a bond that has a 4% coupon rate and matures in 5 years. Assume comparable debt yields 7% and that the bond is sold in increments of $1,000. What is the value of one increment of the bond?
a. $876.99
b. $848.47
c. $164.01
d. $1,200.00
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