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Compute the price of a bond

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Problem - The Florida Investment Fund buys 98 bonds of the Gator Corporation through a broker. The bonds pay 12 percent annual interest. The yield to maturity (market rate of interest) is 14 percent. The bonds have a 20-year maturity.

Using an assumption of semiannual interest payments:

a. Compute the price of a bond.

b. Compute the total value of the 98 bonds.

Reference no: EM133025168

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