If you expect to earn a 12 percent simple rate of return on


You have just purchased a 20-year, $1,000 par value bond. The coupon rate on this bond is 10 percent annually, with interest being paid each quarter. If you expect to earn a 12 percent simple rate of return on this bond, how much did you pay for it?

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Financial Management: If you expect to earn a 12 percent simple rate of return on
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