Named coupon bond for the payment pattern

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Q1 Suppose that the face value (the same as future value or final value) of a bond is $13,500 and the interest rate on it is 8.00 percent. We conclude that the price of this bond in the market is ( ) dollars.

Q2 A five-year coupon bond will make coupon payments of $50.00 at the end of each year (for five years). In year five, it will also pay its face value of $100.00. The interest rate on this bond is R = 10%. So the price of this bond in the market is ( ) dollars. If instead the interest rate was R = 20%, the price of the bond would equal ( ) dollars. (Take a look at the file named Coupon Bond for the payment pattern).

Reference no: EM132302994

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