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Analysts estimate that a bond has an equal probability

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Analysts estimate that a bond has an equal probability of being priced at either $940 or $1,050 one year from today. The bond is also callable at any time at $1,020. What is the expected value of this bond in one year?

a. $1,020

b. $940

c.  $995

d. $1,000

e. $980

Reference no: EM131355260

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