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You purchased a $10,000 bond maturing in 5 years. The coupon rate is 8% payable semi- annually. If the market rate is 7.3% compounded semi-annually,
You purchased a $10,000 bond maturing in 5 years. The coupon rate is 8% payable semi- annually. If the market rate is 7.3% compounded semi-annually, what is the purchase price of the bond?
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SOLUTION 1 To calculate the purchase price of the bond we can use the formula for the present value of a bond PV C 1 1 r2n2 r2 F 1 r2n Where PV Presen...Get Instant Access to Expert-Tailored Solutions
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