In: Finance
An insurance company purchases corporate bonds in the secondary market with six years to maturity. Total par value is $55 million. The coupon rate is 11 percent, with annual interest payments. If the expected required rate of return in 4 years is 9 percent, what will the market value of each bond be then?
a. Less than $1,000
b. Between $1,000 and $1,100
c. Between $1,100.01 and $1,200
d. Greater than $1,200