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  3. 3. a. compute the market price (vb) of the followi

3. A. Compute the market price (Vb) of the following three $1,000 par value bonds...

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Finance

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3. A. Compute the market price (Vb) of the following three $1,000 par value bonds with 10-year maturity. Show steps of your calculations. (10) i. 10% coupon (interest rate) paid semi-annually? Assume the yieldto-maturity of 12%. ii. 4% coupon (interest rate) paid semi-annually? Assume the yieldto-maturity of 12%. iii. 10% coupon (interest rate) paid semi-annually? Assume the yield-to-maturity of 6%. 3(B). Based on your answers in 3(A) what is the relationship between price (Vb) and yield-to-maturity? (3) 3(C). Based on your answers in 3(A) what is the relationship between price (Vb) and coupon rate? (2)

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