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On February 5, 2018, Breanna purchased a newly issued three-year bond that has a face value...

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Finance

On February 5, 2018, Breanna purchased a newly issued three-yearbond that has a face value for $1,000 and a coupon rate of 6.5%. OnFebruary 6, 2018, the market rate on similar bonds rose to 7.2%. IfBreanna sold her bond, what price would she have received? Showyour work using the present value/future value formula.

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Price of the Bond Price of the Bond is the Present Value of the Coupon Payments plus the Present Value of the Face Value Face Value of the bond 1000 Annual Coupon Amount    See Answer
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Transcribed Image Text

On February 5, 2018, Breanna purchased a newly issued three-yearbond that has a face value for $1,000 and a coupon rate of 6.5%. OnFebruary 6, 2018, the market rate on similar bonds rose to 7.2%. IfBreanna sold her bond, what price would she have received? Showyour work using the present value/future value formula.

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