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A bond pays 7% annual interest in semi-annual payments for 10 years. The current yield on similar bonds is 9%. To determine the market value of this bond, you must
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A bond pays 7% annual interest in semi-annual payments for 10 years. The current yield on similar bonds is 9%. To determine the market value of this bond, you must

User Smilingbuddha
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Answer:

A bond pays 7% annual interest in semi-annual payments for 10 years. The current yield on similar bonds is 9%. To determine the market value of this bond, you must determine the market issuance price of the said bond.

Step-by-step explanation:

Issuance price of a bond is based on the relationship between the interest rate that the bond pays and the market interest rate being paid on the same date.

User Treper
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