Difference between transaction and economic exposure

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Reference no: EM131956618

1. Discuss the difference between transaction and economic exposure.

2. Assume that you wish to purchase a 16-year bond that has a maturity value of $1,000 and a coupon interest rate of 9%, paid semiannually. If you require a 6.34% rate of return on this investment (YTM), what is the maximum price that you should be willing to pay for this bond? That is, solve for PV.

Reference no: EM131956618

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