a.  Determine the yield to maturity. b.  What is the value of the bonds to you given the yield to maturity on a​ comparable-risk bond? c.  Should you purchase the bond at the current market​ price?

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
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  ​(Bond valuation)  The
8​-year
​$1,000
par bonds of Vail Inc. pay
13
percent interest. The​ market's required yield to maturity on a​ comparable-risk bond is
17
percent. The current market price for the bond is
$910.
 
a.  Determine the yield to maturity.
b.  What is the value of the bonds to you given the yield to maturity on a​ comparable-risk bond?
c.  Should you purchase the bond at the current market​ price?
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