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Explain the relationship between the number of years

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Reference no: EM132544502

The Nickelodeon Manufacturing Co. has a series of $1,000 par value bonds outstanding. Each bond pays interest semi-annually and carries a coupon rate of 7%. Some bonds are due in 3 years while others are due in 10 years. If the required rate of return on bonds is 10%, what is the current price of:

a) the bonds with 3 years to maturity?

b) the bonds with 10 years to maturity?

c) Explain the relationship between the number of years until a bond matures and its price.

Reference no: EM132544502

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