The intrinsic value, A bond will pay $80 in interest at the

The intrinsic value

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Reference no: EM132036922

1. A bond will pay $80 in interest at the end of each of the next six years, plus the $1,000 principal at the end of the sixth year. If the required yield-to-maturity is 10%, the intrinsic value is:

(a) $874. (b) $913. (c) $952. (d) $988. (e) $1,012.

2. Bond A has a yield-to-maturity of 8%; Bond B at 6.5%. The yield spread in basis points is:

(a) 1500. (b) 15. (c) 0.15. (d) 150. (e) 1.5.

Reference no: EM132036922

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