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You are considering buying one of the two bonds. Bond A has a par value of $2,000, pays 8% coupon annually and matures in 4
You are considering buying one of the two bonds. Bond A has a par value of $2,000, pays 8% coupon annually and matures in 4 years. Bond B has the same characteristic except that it pays coupons semi-annually. Both bonds provide the same yield of 9 percent. Find the prices of these bonds today. To get full credit: 1. - Draw a timeline for each bond, label your cash flows, show with arrows whether you're compounding or discounting 2. - Show the complete formula with all the necessary terms that you would use to solve the problem as if you didn't have a financial calch 3. - Circle the final answer. 4. Indicate whether this is a premium or a discount bond. Circle your
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