Doug has been approached by his broker to purchase a bond of $850. He believes the bond

Question:

Doug has been approached by his broker to purchase a bond of $850. He believes the bond should yield 10%.

The bond Pays 7% annual coupon rate and has 12 years left until maturity. What should doug's analysis of the bond indicate to him?

Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...