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You own a bond that pays a semiannual coupon of $100 on Jan. 1 and July 1 of each year until 2020, and will pay $10,000 in addition to the coupon payment on Jan. 1, 2020. Tomorrow (Jan 2, 2012) you receive two pieces of information:

(a) The best interest rate at which you can invest funds is 2%.
(b) Due to an unexpected change in your financial situation, you need to sell the bond that day (Jan. 2, 2012).

What is the maximum price you can anticipate receiving for the sale of your bond?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9480778

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