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You observe that a 7 % coupon bond issued by Pepsi Bottling Group Inc. currently has a yield to maturity of 4 . 2 8
You observe that a coupon bond issued by Pepsi Bottling Group Inc. currently has a yield to maturity of whereas a coupon bond issues by Coca Cola Consolidated Inc. currently has a yieldtomaturity of Each bond has years to maturity, and you do not anticipate either issuer to default over the time period. If each bond has $ of face value, and you decide to short sell ten units of the more expensive bond in order to raise the funds required to buy ten units of the cheaper bond, then how much money will you have left over after executing these transactions?
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