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A 10-Year $5000 Par Value Bond Pays Interest at J2

Question 31

Multiple Choice

A 10-year $5000 par value bond pays interest at j2 = 7%.The probability that a payment is defaulted,given that all previous payments were made,is 3%.What is the purchase price to yield j2 = 6%.


A) $3264.29
B) $3482.77
C) $5210.78
D) $5293.83

Correct Answer:

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