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Bond Market - PC Richards issues a 5-year, 8% bond, with interest paid semi-annually, for $1,078. The bond is rated Baa and is due 12/28/2025.
- Bond Market - PC Richards issues a 5-year, 8% bond, with interest paid semi-annually, for $1,078. The bond is rated Baa and is due 12/28/2025. (10 points)
- The bond is purchased over its face value, so is said to be purchased at a what? Why would someone purchase this bond for a price that is higher than the face value? Explain in detail.
- How much would the bond holder be repaid at maturity?
- Which credit rating agency provided the Baa rating? What does the rating mean? Explain in detail.
- How do Corporate Bonds differ from Treasury Bonds? List and explain at least 2 differences.
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