ABC company issued a long-term bond for 10-year at a coupon rate of 12%, payable semi-annually. The required rate is 30%. The selling price par bond is P95,000. Should you purchase this bond? A. Yes, because we should take advantage of the premium. B. Yes, because it is selling at a discount. C. No, because it is overpriced. D. No, because it’s too risky at the current rates.
ABC company issued a long-term bond for 10-year at a coupon rate of 12%, payable semi-annually. The required rate is 30%. The selling price par bond is P95,000. Should you purchase this bond? A. Yes, because we should take advantage of the premium. B. Yes, because it is selling at a discount. C. No, because it is overpriced. D. No, because it’s too risky at the current rates.
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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ABC company issued a long-term bond for 10-year at a coupon rate of 12%, payable semi-annually. The required rate is 30%. The selling price par bond is P95,000. Should you purchase this bond?
A. Yes, because we should take advantage of the premium.
B. Yes, because it is selling at a discount.
C. No, because it is overpriced.
D. No, because it’s too risky at the current rates.
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