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Nathan Smith calls his broker to inquire about purchasing a bond of Bell Canada. His broker quotes a price of $975. Nathan is not sure

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Nathan Smith calls his broker to inquire about purchasing a bond of Bell Canada. His broker quotes a price of $975. Nathan is not sure this a a great price for the bond and thinks it might be mispriced based on the fact yields have increased in the last few months. The $1,000 par value bond pays 6.50 percent annual interest payable semiannually, and has 7 years remaining until maturity. The current yield to maturity on similar bonds is 7.30 percent. a. Compute the new price of the bond. b. Do you think the bond is mispriced? Should Nathan buy it from his broker

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