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2. You own a $1,000 face value 10-year bond with semiannual coupons that will mature in 6 years. Immediately after receiving

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Answer #1

Selling price of the original bond is $ $ 1,032.71 calculated using PV function of Excel as follows:

013 =PV(D12,09,010,03)*-1 B Function Formula arguments 2 Face Value (FV) Given $1,000 3 Redemption value Face Value*104% FV $

Treating this amount as the investment (price), Redemption value of new bond is $1,000.46 calculated using the FV function of Excel as follows:

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