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A $34 000, 9.7% bond is purchased 8 years before maturity to yield 4.9% compounded semi-annually. The bond interest is payable semi-annually. How should we
A $34 000, 9.7% bond is purchased 8 years before maturity to yield 4.9% compounded semi-annually. The bond interest is payable semi-annually. How should we expect this bond to sell?
a. Premium (bond rate = 9.7% > 4.9% = market rate) b. Premium (bond rate = 9.7% < 4.9% = market rate) c. Discount (bond rate = 9.7% > 4.9% = market rate) d. At par Premium (bond rate = 9.7% = 4.9% = market rate) e. Discount (bond rate = 9.7% < 4.9% = market rate)
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