Assume that a coupon payment was made yesterday if the


Philadelphia Electric has many bonds trading on the New York Stock Exchange. Suppose Philadelphia Electric's bonds have identical coupon rates of 9.125 but that one issue matures in 1 year, one in 7 years, and the third in 15 years. Assume that a coupon payment was made yesterday. If the yield to maturity for all three bonds is 8% what is the fair price of each bond?

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Finance Basics: Assume that a coupon payment was made yesterday if the
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