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Computing the Present Value of a Debt Security Compute the present value of a five-year bond...

Computing the Present Value of a Debt Security

Compute the present value of a five-year bond with a face value of $2,000, a 10% annual coupon payment, and an 8% effective rate.

Round answers to two decimal places.

$Answer

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Expert Solution

Solution :

The present value of a five-year bond with a face value of $ 2,000, a 10% annual coupon payment, and an 8% effective rate = $ 2,159.71

Please find the attached screenshot of the excel sheet containing the detailed calculation for the solution.

jeff jeffy answered 2 years ago
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