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A $1000 Bond Pays Coupons at J2 = 8% on April

Question 45

Multiple Choice

A $1000 bond pays coupons at j2 = 8% on April 14 and October 14 of every year.You buy the bond on July 31,2010.You are told that the price of the bond on the most recent coupon date (April 14,2010) is $1218.93 and the price of the bond on the next coupon date (October 14,2010) is $1207.69.What is the market (or clean) price,Q,of the bond on July 31,2010?


A) $1247.47
B) $1223.86
C) $1212.30
D) Cannot be determined

Correct Answer:

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