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Rita purchased a new 40 year to maturity corporate bond at par for $5,000. The issuing corporation promised to pay the bondholder $150 interest on
Rita purchased a new 40 year to maturity corporate bond at par for $5,000. The issuing corporation promised to pay the bondholder $150 interest on the face value of the bond (a) If Rita sells the bond after 8 years when the prevailing bond annual coupon rate is (b) Suppose after 20 years that Rita sold the bond for $5,600, what would be the every 6 months. at 8%. How much should she expect to sell the bond for? overall effective annual yield on her investment. (Use interpolation between integer interest rates to assist in solving this problem)
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