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# I am having some difficulty with this. My bond calculations just don't seem to come out correctly. Will you walk me through how I might apply the

I am having some difficulty with this. My bond calculations just don't seem to come out correctly. Will you walk me through how I might apply the coupon rate and determine the value of the bonds?

Compute the value of the following bonds assuming a 3% discount rate (required rate of return):

1. A zero-coupon bond that pays \$1,000 in five years
2. A bond that pays \$1,000 in five years, with five annual coupon payments of \$20 each
3. What is the coupon rate if coupon payments are \$20 per year? At what discount rate would the value of the bond be "at par" (e.g., be worth \$1,000?). Explain your reasoning.

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