Question: 7. Mike buys a corporate bood with a face value of $1000 for $800. The bond matures in 10 years and pays a coupon interest

7. Mike buys a corporate bood with a face value of $1000 for $800. The bond matures in 10 years and pays a coupon interest rate of 586 . Interest is paid every quarter. 32 (a) Determine the effective rate of retum if Mike holds the bond to maturity. A (b) What effective interest rate will Mike get if be kecps the bond for only 5 years and sells it for $900 ? 7. An investor purchased a 5%,5100030-year bood for 5850 with 22 years to maturity. The interest was payable quarterly. The bond was kept for only 9 year and so

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