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Consider two bonds. Each has a face value of $100 and matures in one year. One has a zero coupon payment, and the other pays $10 per year.
A. Explain how the two bonds differ
B. Calculate the price of each bond if the interest rate is 3%
C. Which bond has a higher price? And why
Question 1: What is the equilibrium price and quantity? Question 2: How do you describe the market situation, if the market price is higher than the equilibrium price? Qu
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