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2. (9 points) Ted's Co. offers a six-year semi-annual 8% coupon bond. The market interest rate...

2. (9 points) Ted's Co. offers a six-year semi-annual 8% coupon bond. The market interest rate is 10% annually. What is the current price of this $1,000 face value bond?

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Answer #1

rate positively ..

We have to use financial calculator to solve this
put in calculator-
FV 1000
PMT 1000*8%/4 40
I 10%/2 5%
N 6*2 12
Compute PV ($911.37)
ans = $911.37
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