Compute the present value of bond

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Reference no: EM132431144

Problem: Consider a 10-year, semi-annual interests, $1,000 face value bond. Its annual coupon rate is 6%, but investors in the market want 9% yield to maturity.

Required:

Question 1: Without doing any computation, its market value should be greater or less than the face value? Explain briefly.

Question 2: Compute the (present) value of this bond

Reference no: EM132431144

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