Question

Consider a $500 bond that pays an interest rate of 1.5% with a maturity of one year. Suppose that the prevailing interest rate rises to 6%. Complete the equation to calculate the current bond price by placing the numbers in the correct position. Note that some numbers may be unplaced and some spaces unfilled. Answer Bank current bond price - 500 507.5 2 0.015 0.15 0.06 Now, use the equation to calculate the current bond price to the nearest penny. current bond price: S

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