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BPP Q225

Aamysnowy6y ago
Hi Tutor it calculates the market price for an irredeemable loan, interest will be paid shortly, why the market price includes the interest to be paid? Thanks
John MoffatJohn MoffatTutor6y ago#1
If the interest is about to be paid, then we need a cum int market value. Given that the MV is the PV of future receipts by the investors, then it must include the interest about to receive. Have you watched my free lectures on the valuation of securities?
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