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Coupon

Electrical utility is offering a security, known as zero coupon bond for sale. The terms of the security are investors pay 2337.57 today to purchase the security and the utility will pay the owner of the security 10000 in ten years time. The government is offering a similar security; except that this Security will pay 500 each year for the duration of the security and in the last year will pay the full 10000 plus the 500. The government is selling this security known as a coupon bond for 4787.76

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