Two bonds have par values of $1,000. One is a 4.5%, 16-year bond priced to yield 9.0%.

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Two bonds have par values of $1,000. One is a 4.5%, 16-year bond priced to yield 9.0%. The other is a(n) 8%, 22-year bond priced to yield 5.5%. Which of these two has the lower price? (Assume annual compounding in both cases.)

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Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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Posted Date: Mar 15, 2024 10:53 AM

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Two bonds have par values of $1,000. One is a 4.5%, 16-year bond priced to yield 9.0%.

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To determine which bond has the lower price we need to calculate the present value of each bond For ... View the full answer

Fundamentals of Investing

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