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A bond pays 7% annual interest in semi-annual payments for 10 years. The current yield on...

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Finance

A bond pays 7% annual interest in semi-annual payments for 10years. The current yield on similar bonds is 9%. To determine themarket value of this bond, you must find the interest factors (IFs)for 10 periods at 7%. find the interest factors (IFs) for 20periods at 4.5%. find the interest factors (IFs) for 10 periods at9%. find the interest factors (IFs) for 20 periods at 3.5%.

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4.1 Ratings (728 Votes)
1 Market value of bond when N 10 and Coupon rate is 7 Here FV1000 ASSUME WHEN NOT GIVEN IY 9245 because semi annual bond PMT 00710002 35 SINCE coupon payment will also be semi annualy    See Answer
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Transcribed Image Text

A bond pays 7% annual interest in semi-annual payments for 10years. The current yield on similar bonds is 9%. To determine themarket value of this bond, you must find the interest factors (IFs)for 10 periods at 7%. find the interest factors (IFs) for 20periods at 4.5%. find the interest factors (IFs) for 10 periods at9%. find the interest factors (IFs) for 20 periods at 3.5%.

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