Question
The Milken Investment Fund buys 88 bonds of the Levine Corporation through its broker. The bonds pay 7 percent annual interest. The yield to maturity
The Milken Investment Fund buys 88 bonds of the Levine Corporation through its broker. The bonds pay 7 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds have a 25-year maturity. Assume the par value of the bonds is $1,000. Use Appendix B and Appendix D. Using an assumption of semiannual interest payments, (Do not round intermediate calculations. Round "PV Factor" to 3 decimal places. Round the final answers to 2 decimal places.)
a. Compute the price of a bond.
Price of the bond $
b. Compute the total value of the 88 bonds.
Total value $
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