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QUESTION
AN INVESTOR PURCHASES A 20-YEAR, $1000 PAR VALUE BOND THAT PAYS SEMIANNUAL INTEREST OF $40 AND THE TERMINALVALUE OF $1000 WHEN THE BOND MATURE AT THE...
AN INVESTOR PURCHASES A 20-YEAR, $1000 PAR VALUE BOND THAT PAYS SEMIANNUAL INTEREST OF $40 AND THE TERMINALVALUE OF $1000 WHEN THE BOND MATURE AT THE END OF 20 YEARS. IF THE SEMIANNUAL MARKET RATE OF INTEREST IS FIVE PERCENT, WHAT IS THE CURRENT MARKET VALUE OF THE BOND?
