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A 15-Year,7 Percent Coupon Annual Payment Corporate Bond Has a PV

Question 64

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A 15-year,7 percent coupon annual payment corporate bond has a PV of $1,055.62. However,you pay $1,024.32 for the bond. By how many basis points is your E(r)different from your r?

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r = 6.41% 1,055.62 = 70 × [PVIFA15 yr,r]...

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