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(Solved): 5 Imagine A World Of Complete Certainty. A One-year Discount Bond Has A Face Value Of $10,000. Suppo...
5 Imagine a world of complete certainty. A one-year discount bond has a Face Value of $10,000. Suppose investors are able to borrow and lend at a bank at a 10% interest rate. (a ) In such a world would the market price of that bond be higher than the present discounted value of the bond’s Face Value? Briefly explain why or why not. No diagram is needed.
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