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You want to buy a bond with a face value of $1000, and an annual coupon of 8% paid quarterly.

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You want to buy a bond with a face value of $1000, and an annual coupon of 8% paid quarterly. The annual market rate (the discount rate) is 10% now. This bond will mature in 10 years. The fair value of this bond today should be $ 

 Assume the discount rate in year 2 goes down to 8%. All other info is the same. The fair value of this bond in year 2 is $

 complete in this format:

NPR
Coupon Rate
I/Y or Rate
PMT
PV
FV

Expert Answer:

Answer rating: 100% (QA)

To calculate the fair value of the bond we can use the present value formula Let s go through the ca View the full answer


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Related Book For  answer-question
Introduction to Operations Research

Introduction to Operations Research

ISBN: 978-1259162985

10th edition

Authors: Frederick S. Hillier, Gerald J. Lieberman

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Posted Date: September 03, 2023 04:54:45
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