months over the last six years. Bond N also has a face value of $20,000 and a maturity of 20 years; it makes no coupon payments over the life of the bond. If the required return on both these bonds is 12 percent compounded semiannually, what is the current price of Bond M? Of Bond N?

Valuing the Call Feature Consider the prices on the following three Treasury issues as of February 24, 2002:


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