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Business, 18.03.2021 01:50 sydneydavis57

(1 point) (A bond forward) A certain 10-year bond is currently selling for $ 920 A friend of yours owns a forward contract on this bond that has a delivery date in 1 year and a delivery price of $ 940. The bond pays coupons of $ 80 every 6 months, with one due 6 months from now and another just before maturity of the forward. The current interest rates for 6 months and 1 year (compounded semiannually) are 7% and 8%, respectively (annual rates compounded every 6 months). What is the current value of the forward contract? First solve for the current forward price Ft of the bond:

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