Question: ABC Inc has issued 1 5 - year bonds that make semiannual coupon payments at a rate of 5 . 5 percent. The current market

ABC Inc has issued 15-year bonds that make semiannual coupon payments at a rate of 5.5 percent. The current market rate for similar securities is 6.5 percent.
What is the current market value of one of these bonds?
Would you purchase one of these bonds if it was offered to you at $925? Why?
What do you expect would happen to the bonds price if the market rate decreased to 5%?
What is your Effective Annual Yield if you purchase the bond at $925 and hold it to maturity?

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