Your company is working fine, and you just had a great idea for a new...
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Finance
Your company is working fine, and you just had a great idea for a new exciting project. You are planning to issue bonds with the following characteristics:
Par: 1000
Time to maturity 15 years
Coupon rate 8%
Semiannual payments
The price of the bonds are going to be different depending on the Yield to maturity, the expectations are:
25% Chances YTM:4%
35% Chances YTM:5,5%
40% Chances YTM:7%
Calculate the price of the bond for each of the cases.
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