Question: At the end of the current year you observe the

At the end of the current year, you observe the following data about Government of Canada pure discount bonds (zero coupon bonds):

a. What price do you expect bond C to sell for at the end of year 2?
b. The Government of Canada is considering issuing a coupon bond. The bond will pay a
7-percent coupon, paid annually. The face value of the bond will be $1,000. What price would you expect the bond to sell fortoday?
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  • CreatedFebruary 25, 2015
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