Ron Rhodes calls his broker to inquire about purchasing a bond of Golden Years Recreation Corporation. His broker quotes a price of $$1,170.$ Ron is concerned that the bond might be overpriced based on the facts involved. The $$1,000$ par value bond pays $15$ percent annual interest payable semiannually, and has $15$ years remaining until maturity. The current yield to maturity on similar bonds is $14$ percent.

a$.$ Compute the new price of the bond. $($Use a Financial calculator to arrive at the answers. Do not round intermediate calculations. Round the final answer to $2$ decimal places.$)$

New price of the bond $

b$.$ Do you think the bond is overpriced?

multiple choice

No

Yes