Consider three 5-year regular coupon bonds; each has a face value of $100. All bonds mature on the same date. All bonds pay annual coupons at the same point in time. The coupons and current market prices for these bonds are given as following.
Bond A: Coupon = $8.00, Market Price = $95.123
Bond B: Coupon = $4.00, Market Price = $79.321
Bond C: Coupon = $7.00, Market Price = $_____
What should be the theoretical market price of Bond C?
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