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How do determine what is the value of the bond

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Reference no: EM132713066

Problem 1: Assume that a 12-year semi-annual, 7% bond is callable after 5 years at 105% of par value and the discount rate in today's market is 5%. Using the price-to-worst method, what is the value of this bond?

Group of answer choices

Option 1: $1,000

Option 2: $1,149

Option 3: $1,127

Option 4: $1,268

Option 5: $1,010

Reference no: EM132713066

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