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Question 4: What is the value today of the following two bonds? Which of the two...

Question 4: What is the value today of the following two bonds? Which of the two bonds has a greater value today – bond A or B?

Bond A:                                                                                  

Par Value: $1,400

Coupon Rate = 10% paid annually

Yield to Maturity = 5.5%

Maturity = 4 Years

Bond B:

Par Value: $1,600

Coupon Rate = $140 paid annually

Yield to Maturity = 4%

Maturity = 5 Years

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