You see a person drop an envelope at a busy airport. There is a better...
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You see a person drop an envelope at a busy airport. There is a better than 85% chance that you can catch the person who dropped it, if you wanted to, but it would take a running effort by you. Because it is a busy airport, there is also the possibility that someone else also saw the envelope drop, and could see you pick it up, but they would not know what it contained. It turns out that the envelope contains ten (10) Registered Bonds and ten (10) Bearer Bonds, all with a coupon rate of 8.84%. The bonds pay interest semi-annually and have five (5) years left to maturity. The yield-to-maturity is 7.50%.
What is the Present Value of all of the Bonds?
Given the circumstances in this Bond question, what would you do, and why?
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