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$10,000 face value strip bond has 15 years remaining until maturity. If the prevailing market rate of return is 6.5% compounded semiannually, what is the fair market value of the strip bond?

Correct Answer: 3710.29

Explanation:

i=j/m


n =m(Term) = 2(15.5)  =31


Fair market value  Present value of the face value


 =FV(1+  i)^-n


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