Bond with coupon rate convertible semiannually

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A $1000 bond with coupon rate c convertible semiannually will be redeemed at par in n years. The purchase price to yield 5% convertible semiannually is P. If the coupon rate were c − 0.02, then the price of the bond would be P − 300. Another $1000 bond is redeemable at par at the end of 2n years. It has a coupon rate of 7% convertible semiannually and the yield rate is 5% convertible semiannually. Calculate the price of the 2n year bond.

Reference no: EM131573358

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