Question: You are interested in receiving a true yield on a government bond investment of 8 percent. Your broker suggests a 20-year issue with 12 years

You are interested in receiving a true yield on a government bond investment of 8 percent. Your broker suggests a 20-year issue with 12 years to maturity, an original coupon rate of 10 percent, payable semiannually, and a face value of $10,000. The bond has had its coupons stripped, so you won't receive the coupon payments. What price will you pay?

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