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Consolidated Fuzz, Inc. is selling corporate bonds for $1,000 (face value). They pay interest quarterly and 10% is the nominal interest rate. The bonds mature

Consolidated Fuzz, Inc. is selling corporate bonds for $1,000 (face value). They pay interest quarterly and 10% is the nominal interest rate. The bonds mature in 15 years.

a) what is the effective rate for an investor that pays full price and keeps the bond to maturity?

b) The brokerage firm charges a 2% from the initial purchase price, now what is the effective interest rate paid?

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