Convention bond and zero coupon bond

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Reference no: EM132039228

You have choice of purchasing two mortgage backed securities: a convention bond and a zero coupon bond. Both bonds have a $10,000 par value. The conventional bond pays interest semi-annually and has a 8.75 percent coupon. The second bond is a zero coupon structure. You require a 10.50% return. What are the bond prices?

Reference no: EM132039228

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