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market value of the bond

8. The Bonds of Microfood, Inc. carry a 10% annual coupon, have a $1,000 face value, and nature in 4 years. Bonds of equivalent risk yield 7%. The market value of the bonds should be (assume annual compounding):
a. $1,011.20
b. $1,087.25
c. $1,095.66
d. $1,101.62
e. $1,160.25

Solution Summary

The market value of the bond is illustrated.

$2.19