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A semiannual corporate bond has a face value of $1.000, a yield to maturity of 1.2 percent, and a coupon rate of 7.5 percent.



9. A semiannual corporate bond has a face value of $1.000, a yield to maturity of 1.2 percent, and a coupon rate of 7.5 percent. The bond matures 10 years from today. This bond: 

a. pays interest payments of $75.00 every six months. 

b. sells at par value. 

c. is currently quoted at a price of 101.02. 

d. has a current yield of 7.34 percent 


10. Determine how much you would be willing to pay for a bond that pays $60 annually indefinitely and never matures (ie, a perpetuity), assuming you require an 8 percent rat return on this investment, 

a. $480 b. $743 c. $1,000 d. $750

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