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Question: someone buys a 5 year government treasury bond at pt...

Question details

Someone buys a 5 year government treasury bond at $Pt

a.

Can the price be above face value? Why?

b. Can the price be below face value? Why?

c.

If he/she wants to sell it after 2 years, will he/she makes a positive rate of return or

negative rate of return? Explain.

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