Question: A $ 5 0 0 , 9 % ( 2 ) bond maturing on 1 0 / 1 / 2 0 is sold on 4

A $500,9%(2) bond maturing on 10/1/20 is sold on 4/1/14.
(a) If the buyer desires 8%(2) on his money, what will he pay for the bond?
(b) Was the bond sold at a premium or a discount? What is the premium/discount?
(c) If the bond has a call provision of 105 that may be taken on 10/1/16, what is its value
when 8%(2) is still desired?

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