What is the total cost

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Reference no: EM133120610

Could you please help me with the following questions?

Background information:

Maturity: 8 years semi

Coupon: 9%

YTM: 4%

Reinvestment Rate: 2.5%

a) If you buy 1,000 bonds, excluding accrued interest expense, what is the total cost?

b) If you are going to fund a $100 million liability with this bond, how many bonds are needed? What is the cost of the portfolio?

Reference no: EM133120610

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