Question: Solve for 1 & 2: IMC has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate

Solve for 1 & 2:

  1. IMC has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the IMC bond is 7.5%, then the price that this bond trades for will be closest to:

    A

    $1045
    B

    $691
    C

    $1000
    D

    $957

  2. IMC has a bond outstanding with a face value of $1000 that reaches maturity in 15 years. The bond certificate indicates that the stated coupon rate for this bond is 8% and that the coupon payments are to be made semiannually. Assuming the appropriate YTM on the IMC bond is 7.5%, then this bond will trade at

    a

    par.
    b

    a discount.
    c

    a premium.
    d

    None of the above

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