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1)a 10 year, 6% annual coupon rate, $1000 face value bond iscurrently trading at

ID: 2770643 • Letter: 1

Question

1)a 10 year, 6% annual coupon rate, $1000 face value bond iscurrently trading at $1056, the yield to maturity of this bondis? 2)what will be the fair market price of a 5 year, $1000 parvalue bond that makes semi-annual payments, and has a coupon rateof 8%, and offers a yield to maturity of 7%? 3)you are offered a zero coupon bond with a $1000 facevalue with 3 years left to maturity. if the required return on thebond is 9%, what is the most you should pay for this bond? 1)a 10 year, 6% annual coupon rate, $1000 face value bond iscurrently trading at $1056, the yield to maturity of this bondis? 2)what will be the fair market price of a 5 year, $1000 parvalue bond that makes semi-annual payments, and has a coupon rateof 8%, and offers a yield to maturity of 7%? 3)you are offered a zero coupon bond with a $1000 facevalue with 3 years left to maturity. if the required return on thebond is 9%, what is the most you should pay for this bond?

Explanation / Answer

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