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Unformatted text preview: n = 30, i = 7, FV = 1,000, PMT = 40 PV = ()627.73 After one year, the maturity of the bond will be 29 years and its price will be: 66 . 553 $ 08 . 1 000 , 1 $ ) 08 . 1 ( 08 . 1 08 . 1 40 $ PV 29 29 Financial calculator: n = 29, i = 8, FV = 1,000, PMT = 40 PV = ()553.66 The capital loss on the bond is $553.66 $627.73 = $74.07. The rate of return is therefore: ($40 $74.07)/$627.73 = 0.0543 = 5.43%...
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 Fall '09
 LI
 Finance

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