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You are considering a 10-year, Rs. 1000 par value bond. Its coupon rate is 10% and interest is paid semiannually. If you require an effective

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You are considering a 10-year, Rs. 1000 par value bond. Its coupon rate is 10% and interest is paid semiannually. If you require an effective annual interest rate of 8%, how much should you be willing to pay for the bond? Is effective annual interest rate differing from coupon rate? Explain

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