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Rhonda Rhodes calls her broker to inquire about purchasing a bond of Golden Recreation Corporation. Her broker quotes a price of $5,100, which includes a
Rhonda Rhodes calls her broker to inquire about purchasing a bond of Golden Recreation Corporation. Her broker quotes a price of $5,100, which includes a $50 commission. Rhonda is concerned that the bond is overpriced based on the facts involved. The $ 5,000 par value bond pays 8 percent interest, and it has 15 years remaining until maturity. The current yield to maturity on similar bonds is also 8 percent. Do you think the bond is overpriced? Do the
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