Question: Bond A and Bond B are identical except for their annual coupons and prices: Bond A Bond B Face value $30,000.00 $30,000.00 Coupon rate 7%

Bond A and Bond B are identical except for their annual coupons and prices:

Bond A

Bond B

Face value

$30,000.00

$30,000.00

Coupon rate

7%

8%

Years to maturity

5

5

Price

$28,226.71

?

Required:

Determine the price of Bond B. (5 marks)

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