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What is the fair market price of the bond

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Reference no: EM132619088

Problem 1: You are considering the purchase of a corporate bond. The bond has six years to maturity, a face value of $1000, and pays coupons semi-annually at a rate of 5.0%. The current yield-to-maturity (market interest rate) for bonds of this risk is 6.8%. What is the fair market price of the bond? Is the bond trading at a discount or a premium?

Reference no: EM132619088

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