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A 10-year annual payment corporate bond has a market price of $1,050. It pays annual interest of $100 and its required rate of return is
A 10-year annual payment corporate bond has a market price of $1,050. It pays annual interest of $100 and its required rate of return is 9 percent. Is the bond fairly priced, underpriced, or overpriced? Also find the magnitude of the mispricing (if any).
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