Elucidate what is the fair price of this bond

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Reference no: EM1349876

Suppose that two UK government bonds have same face values with £100. One has an outstanding maturity of 2.5 years. Its coupon rate is 9.75% and coupons are paid semi-annually. If investors demand a yield of 8%, elucidate what is the fair price of this bond

Reference no: EM1349876

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