What is the discounted expected value of the bond

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The city of Detroit recently issued a 5-year zero coupon bond. The face value is $1,000 and there are no coupon payments. In other words, in five years the city should pay the bond owner $1,000. What is the discounted expected value of the bond assuming the interest rate is 3% and there is a 1% probability of default in any year? Please show work

Reference no: EM131044332

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