Determining the fair price of bond


Charter Financial has many bonds trading on the New York Stock Exchange. Suppose Charter Financial'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: Determining the fair price of bond
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