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You manage an investment portfolio and are considering a 1 0 - year bond with a face value of $ 1 , 0 0 0
You manage an investment portfolio and are considering a year bond with a face value of $ that, according to the prospectus, you can purchase on February when it is initially issued. The bond is designed to provide a yieldtomarket YTM and makes annual February coupon payments. The underwriter has stated the issuers intention to sell the bonds at face value par and your plan is purchase the bonds at issuance for $ apiece, meaning the YTM will equal the coupon rate on the date of sale.
If the YTM is expected to remain constant, what is the minimum price you would accept to sell the bond on January the day before you receive the nd coupon payment?
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