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A bond of par value 1,000 pays a coupon of 4% p.a. annually for 20 years and the par value is 1,000

(coupon calculated on this number and not on maturity value). Calculate the following: The price of the bond and the current yield/ maturity of the bond is also 4%, if the 1. a. maturity value is: . $1,000 i. $950 

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Cash flow (Coupon) = Coupon Rate/100*Par value = 4/100*1000 = 40 Price of the Bond: Find the present value of the annual... View the full answer

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