A bond with a par value of $1,000, a maturity of 14 years, and an annual interest or coupon rate of 9% sells in the market for $1,100. The market required return for a comparable bond at risk is 10%.

Answer or calculate the following:

1. Is the bond selling at par, at a premium, or at a discount? explain

2. Is the bond being sold in the primary or secondary market? explain

3. List two reasons why a company or government issues or sells bonds. A.

b.

4. Calculate the bond's yield to maturity.

YMT = ___________________.

5. Show procedure or what you did to get to that performance.

6. Determine the value of the bond or the price paid, given the required rate of return.

Price = ______________________.

7. Show procedure or what you did to determine the price.

8. Would you buy the bond? explain