Considering the purchase of security

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Reference no: EM13840140

Suppose that you’re considering the purchase of a security that has the following timeline of payments:

Year Interest face value

1 600

2 600

3 600

4 600; 1000

Suppose that you have just purchased the security, and suddenly the market interest rate falls to 5%. What is the security worth?

Reference no: EM13840140

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