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What should be the current market value of the following bond? [Hint: Use an appropriate financial calculation. Coupon yields are paid semi-annually, so assume semi-annual compounding.]

Par value $1000
Coupon rate 7%
Years to maturity 5
Market interest rate 9%

a. $877

b. $921

c. $1000

d. $1078

e. None of the above

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