The market price is $850 for a 10-year bond ($1,000 par value) that pays 9 percent...

The market price is $850 for a 10-year bond ($1,000 par value) that pays 9 percent annual interest but makes interest payments on a semiannual basis (4.5 percent semiannually). What is the bond's yield to maturity?

The bond's yield to maturity is ____ (Round to two decimal places.)

2. (Bond valuation)Fingen's 16-year, $1,000 par value bonds pay 14 percent interest annually. The market price of the bonds is $870 and the market's required yield to maturity on a comparable-risk bond is 15 percent.

a. Compute the bond's yield to maturity.

b. Determine the value of the bond to you, given your required rate of return.

c. Should you purchase the bond?

1) What is your yield to maturity on the Fingen bonds given the market price of the bonds? _______ % (Round to two decimal places.)

--> You should not OR should not purchase the Fingen bonds because they are currently overpriced OR underpriced.

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jeff jeffy answered 1 year ago

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The market price is $850 for a 10​-year bond ($1,000 par​ value) that pays 9 percent...

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The market price is $850 for a 10-year bond ($1,000 par value) that pays 9 percent...