Question: Bond Valuation. Sandy is considering purchasing bonds with a par value of $ 1 0 , 0 0 0 . The bonds have an annual
Bond Valuation. Sandy is considering purchasing bonds with a par value of $ The bonds have an annual coupon rate of and six years to maturity. The bonds are priced at $ Sandy will only buy these bonds if the expected return from holding the bonds would generate a return of at least percent. Should Sandy she buy these bonds?
If Sandy requires a return, the amount she should be willing to pay for the bonds is $ Round to the nearest dollar.
If Sandy requires a return, should she buy these bonds? Select the best answer below.
A No; if the price exceeds what she should be willing to pay, Sandy's return would be less than so she should not buy these bonds.
B Yes; if the price exceeds what she should be willing to pay, Sandy's return would be more than so she should buy these bonds.
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