The bond pays its coupons semi-annually

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(Bonds Value) Suppose a 20-year Treasury bond has a coupon rate of 7% and a face value of $100 and that the effective annual interest rate is 5%.

(a) If the bond pays its coupons annually, what is the bond's price?

(b) Suppose that the bond pays its coupons semi-annually, what is the price of the bond?

Reference no: EM131959596

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