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QUESTION THREE – Bond Valuation A high net-worth individual has invested in a 15-year treasury bond...

QUESTION THREE – Bond Valuation

A high net-worth individual has invested in a 15-year treasury bond with par value of $1,000,000 and a 12% coupon rate. It pays coupon every quarter and the bond just made its twentieth payment. 15-year treasury bonds are currently yielding 13%, 10- year treasury bonds are yielding 10% and, 5-year treasury bonds are yielding 8%.

Required:

Calculate the price of the bond and advise the bond holder to sell or hold on to the bond and why? (Need Explanations step by step)

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jeff jeffy answered 1 year ago
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