The interest is paid annually

Reference no: EM13528131

$2,000 bond has a coupon rate of 11 percent and matures after eight years. Interest rates are currently 8 percent.

a.What will the price of this bond be if the interest is paid annually? Round your answer to two decimal places.
$ 2344.80

b.What will the price be if investors expect that the bond will be called with no call penalty after two years? Round your answer to two decimal places.
$ 2107.00

c.What will the price be if investors expect that the bond will be called after two years and there will be a call penalty of one year's interest? Round your answer to two decimal places

Reference no: EM13528131

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