A bond pays $50,000 per year and has a face value of $500,000 at the end of 8 years when it has to be redeemed. If its current discounted price is $390,000, what true interest could be earned on the bond? Ans. (14.9%)
A bond pays $50,000 per year and has a face value of $500,000 at the end of 8 years when it has to be redeemed. If its current discounted price is $390,000, what true interest could be earned on the bond? Ans. (14.9%)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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A bond pays $50,000 per year and has a face value of $500,000 at the
end of 8 years when it has to be redeemed. If its current discounted price
is $390,000, what true interest could be earned on the bond?
Ans. (14.9%)
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