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| rev | Admin | (Created page with "'''Solution: B''' The present value equation for a par-valued annual coupon bond is <math>P = Fv^n + Fra_{\overline{n}|i}</math>; solving for the coupon rate r yields <math display = "block"> r={\frac{P-F\nu_{i}^{\ n}}{F a_{\overline{{{n}}}|i}}}={\frac{P}{a_{\overline{{{n}}}|i}}}{\left(\frac{1}{F}\right)-{\frac{\nu_{i}^{\ n}}{a_{\overline{{{n}}}|i}}}}. </math> From the first two bonds: 0.0528 = x/1000 + y and 0.0440 = x/1100 + y. Then, 0.0528 – 0.044 = x(1/1000 –...") | Nov 19'23 at 18:38 | +624 |