12) Suppose you have a K1, 000 bank deposits. The interest rate is 6% compounded quarterly for 1 year. What is the Effective Annual Interest Rate (EAR)? 13) Bond C has a K1,000 face value and provides an 8% annual coupon for 30 years. The appropriate discount rate is 10%. What is the value of the coupon bond? 14) Bond P has a K1, 000 face value and provides an 8% annual coupon. The appropriate discount rate is 10%. What is the value of the perpetual bond?
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