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Your friend wants to borrow money form you and promised to pay you $500,000 back in 10 years and $4000 a year for the next
Your friend wants to borrow money form you and promised to pay you $500,000 back in 10 years and $4000 a year for the next 10 years. Assume market interest rate is 8%. How much money should you lend your friend? You want to buy a $100,000 par value 2 year bond. Stated interest rate is 8%. Market rate is 10%. Interest paid semiannually. How much is the bond price you should pay?
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