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A Coupon Bond Which Pays Interest Annually, Has a Par

Question 9

Multiple Choice

A coupon bond which pays interest annually, has a par value of $1 000, matures in 5 years and has a yield to maturity of 12%. If the coupon rate is 9%, the intrinsic value of the bond today will be approximately ________.


A) $856
B) $892
C) $926
D) $1 000 PV0 = $90

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