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A utility company sold an issue of 6 percent bonds 5 years ago. Each bond has a face value (value at maturity) of $1000, which
A utility company sold an issue of 6 percent bonds 5 years ago. Each bond has a face value (value at maturity) of $1000, which is due in 13 years from now. The bond pays interest twice a year (3 percent per period). Because of market conditions, the bond can now be sold on the bond market for only $760. If a buyer wants his or her investment to earn 10 percent nominal rate per year, compounded semiannually, and must pay a brokerage charge of $20 to purchase each bond, should the buyer purchase the bond?
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