A $100,000, 3% bond, redeemable in 10 years, interest payable semi-annually is purchased to yield 7%, payable

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A $100,000, 3% bond, redeemable in 10 years, interest payable semi-annually is purchased to yield 7%, payable semi annually. (15 marks total between the 2 parts)

a. What is the purchase price of the bond? (10 marks)

b. Is this bond trading at par, at a discount or at a premium, and what is the appropriate value.

Posted Date: May 18, 2024 07:14 PM

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A $100,000, 3% bond, redeemable in 10 years, interest payable semi-annually is purchased to yield 7%, payable

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