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4. A $5000, 10 year bond with bond payments of $200 paid every six months is purchased at t0 by our friend Ellie the Electrical
4. A $5000, 10 year bond with bond payments of $200 paid every six months is purchased at t0 by our friend Ellie the Electrical Engineer for par value. After receiving the th dividend, Ellie sells the bond to Fred the Fire Protection Manager at a price sufficient to yield a return of 1% compounded semiannually. Fred keeps the bond until it matures and redeems it for par value. a) What is the nominal bond rate. b) Assume Fred pays $4676 for the bond and then keeps it to maturity, redeeming it for par value. What do you know about Fred's yield rate on the bond? You do NOT have to solve this exactly, but you do have to support your
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