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19. A firm issues two-year bonds with a coupon rate of 6.7%, paid semiannually. The credit spread for this firms two vear de

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Answer #1

Interest Rate = 0.031 + 0.008

Interest Rate= 3.90%

Calculating Price of bond,

Using TVM Calculation,

PV = [FV= 100, PMT = 3.350, N = 4, I = 0.039/2]

PV = $105.34

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