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QUESTION
How much should you pay for a bond that has a $1,000 par value, stated interest rate of 5% annually, and that matures in 8 years?
How much should you pay for a bond that has a $1,000 par value, stated interest rate of 5% annually, and that matures in 8 years? The bond pays semi-annual (twice per year) interest rates. The current market interest rate is 4%.
