Sakara Co. bonds are selling in the market for $1,000.These 9-year bonds pay 13% interest annually...

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Sakara Co. bonds are selling in the market for $1,000.These 9-year bonds pay 13% interest annually...

Sakara Co. bonds are selling in the market for $1,000.These 9-year bonds pay 13% interest annually on a $1,000 par value. If they are purchased at the market price, what is the expected rate ofreturn?

--------- % (answer in two decimal)

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Answer 1

Answer #1

Market Price is equal to the par value = $1,000

The bonds will be redeemed at par value i.e. $1,000

Hence, the rate of return will be equal to the interest rate

i.e. 13%

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Answer 2

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