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You have just been told by your friend that he wishes to buy a strip bond (no coupons) for $200,000 and it will pay him
You have just been told by your friend that he wishes to buy a strip bond (no coupons) for $200,000 and it will pay him 425,000 in a lump sum in 11 years. If you want to make a 7% return on this investment, is it for you or maybe you should choose something else. What do you think? Explain your position and how you arrived at it?
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