Question: An n-year $1,200 par value bond has an annual yield rate i that is 1.25 times of its annual coupon rate r. You are given

An n-year $1,200 par value bond has an annual yield rate i that is 1.25 times of its annual coupon rate r. You are given the discount factor (1 + i) n = 0.3855. (a) Calculate the value of premium (or discount). (b) If the amount of amortization of premium (or accumulation of discount) in the first coupon is 9.253, find i and r.

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