Vertigo bonds have a par value of RM1,000. . The bonds carry a coupon interest rate of 14 percent. Interest is paid semi-annually. The bond will mature in seven years. If the current market price is RM1,092.65, will you purchase the bonds if your required interest rate is 10 percent? What is your intrinsic value for the bonds?

Select one:

a. Yes; RM1,294.70

b. Yes; RM1,115.72

c. No ; RM914.25

d. Yes; RM1,197.98

What is the current price of a bond maturing in 12 years, with RM1,000 par value, coupon interest rate of 14 percent paid semi-annually, that has a YTM of 12 percent?

Select one:

a. RM 610.80

b. RM1,123.90

c. RM1,125.50

d. RM 690.30