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Relation between required ror and fair values of bonds

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Question: A bond you are evaluating has a 10 percent coupon rate (compounded semiannually), a $1,000 face value, and is 10 years from maturity.

a. If the required rate of return on the bond is 6 percent, what is its fair present value?

b. If the required rate of return on the bond is 8 percent, what is its fair present value?

c. What do your answers to parts (a) and (b) say about the relation between required rates of return and fair values of bonds?

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This assignment is based on the concepts of the management studies. In this task, there are four problems, based on the risk management and insurance, financial derivatives etc. In this given task, we have to evaluate the fair value, fair present value at the various different rate of return. Also, we have to discuss the Financial Services Modernization Act of 1999 with references to the U.S. Treasury Measures etc. In the last task, we have to compare the initial deposit insurance for the two provided cases respectively.

Reference no: EM131632291

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