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You are trying to figure out the price you should pay for a Corporate Bond with a exist10,000 face value. Your minimum acceptable return is 10% per year, compounded semi-annually. The bond broker wants you to pay exist8,000 for the bond and in return he will get a 6% coupon rate semiannually and the face value of the bond after 8 years. Will the investment meet your minimum acceptable return of 10% or is the bond broker trying to pull a fast one? SHOW WORK.

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Financial Management, Finance

Category:- Financial Management
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