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Compute current price

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Reference no: EM132999162

Suppose Gomas Enterprises has issued a bond that pays 11% interest ($55 semiannual coupons), and the current market yield is 9%.

(a) If the bond matures in 20 years, compute its current price.

(b) What if the bond matures in 1 year?

(c) What do you notice when comparing the 2 prices and their components?

Reference no: EM132999162

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