What is fair price

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Question 3-Your broker has just called you to say that she has a great investment for you. She suggests that you buy five 30-year General Motors bonds that have 15 years left to maturity. Each bond would pay you $66 each six months. What is the contract rate of interest on the bond indenture? If the bonds are selling for a 8.0% premium, how much will you pay total for the bonds? What is the yield to maturity?Question1-You are looking to buy a bond that has exactly 13 years until maturity. The bond has a stated rate of 4.7%. The current market rate is 5%. How much should you be willing to pay for the bond?

Question 2-You own a 30 year AAA rated corporate bond that you bought exactly 13 years ago. The stated rate on the bond indenture is 7.5%. The yield to maturity on new issues of similar corporate bonds is 5.2%. Someone offers you $1,225 for your bond. Is this a fair price, to you the seller? What is the fair price?

Reference no: EM13131771

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