A bond that matures in 15 years has a ​$1,000 par value. The annual coupon interest rate is 12 percent and the​ market’s required yield to maturity on a​ comparable-risk bond is 14 percent. What would be the value of this bond if it paid interest​ annually? What would be the value of this bond if it paid interest​ semiannually?

a.  The value of this bond if it paid interest annually would be $. ​(Round to the nearest​ cent.)

 

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Which of the following bonds offers the highest current​ yield?

a. ​A(n) 9.66​%, ​20-year bond quoted at 100.576

b. ​A(n) 16.10​%, ​15-year bond quoted at 167.627

c. ​A(n) 4.83​%, ​18-year bond quoted at 50.288

The current yield of the bond in part a is

​%. ​(Round to two decimal​ places.)

The current yield of the bond in part b is

​%. ​(Round to two decimal​ places.)

The current yield of the bond in part c is

​%. ​(Round to two decimal​ places.)

Which of the three bonds offers the highest current​ yield?  ​(Select the best answer​ below.)

A. The bond in part b has the highest current yield because it has the highest coupon rate and the highest market value.

B. All of the above bonds have a current yield of approximately 9.60​%.

C. The bond in part a has the highest current yield because it is held for the longest period of time.

 

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