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LONG ANSWER (do one of the two problems) Bond Valuation (IA or IB: 10 marks) IA. Dexter Mills issued 25-year bonds two years ago at

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LONG ANSWER (do one of the two problems) Bond Valuation (IA or IB: 10 marks) IA. Dexter Mills issued 25-year bonds two years ago at a coupon rate of 10.2 percent. The bonds make semiannual payments. The yield-to- maturity on these bonds is 9.2 percent. What is the current bond price? IB. Define liquidity risk, default risk, and maturity risk and explain how these risks relate to bonds and bond yields

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