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Question
One year ago Lerner and Luckmann Co. issued 15-year, noncallable, 7.5% annual coupon bonds at their par value of $1,000. Today, the market interest rate on these bonds is 5.5%. What is the current price of the bonds, given that they now have 14 years to maturity?a. $1,077.01
b. $1,104.62
c. $1,132.95
d. $1,162.00
e. $1,191.79
Answer
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