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    Bond Questions

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    9. A bond with a face value of $1000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price?

    10. A Corporate bond carries a coupon rate of 8%, has 9 years to maturity, and sells at a yield to maturity of 7%. A) What interest payments do bondholders receive each year? B) At what price does the bond sell, assuming annual interest payments?

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    Solution Preview

    9. A bond with a face value of $1000 has a current yield of 7% and a coupon rate of 8%. What is the bond's price?

    Current Yield = Annual Interest/Price
    Annual Interest = 1,000X8% = $80
    Price = Annual Interest/Current Yield ...

    Solution Summary

    The solution explains how to calculate the bond price and the bond interest payments

    $2.19

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