1) a. Assume a par value of $1,000. Caspian Sea plans to issue a 11.00...
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1) a. Assume a par value of $1,000. Caspian Sea plans to issue a 11.00 year, semi-annual pay bond that has a coupon rate of 8.20%. If the yield to maturity for the bond is 7.86%, what will the price of the bond be?
b. Assume a par value of $1,000. Caspian Sea plans to issue a 18.00 year, semi-annual pay bond that has a coupon rate of 7.97%. If the yield to maturity for the bond is 8.33%, what will the price of the bond be?
c. Assume a par value of $1,000. Caspian Sea plans to issue a 28.00 year, semi-annual pay bond that has a coupon rate of 5.00%. If the yield to maturity for the bond is 5.0%, what will the price of the bond be?
d. What is the value today of receiving $1,631.00 per year forever? Assume the first payment is made next year and the discount rate is 9.00%.
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