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Will this bond be sold at a discount or a premium

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Q1) Russel's Rockets issues a $700,000 bond on 1/1/20Y1 with a stated rate of 8%. Interest is paid annually. The bond matures in 12 years. The effective rate is 10%.

Will this bond be sold at a discount or a premium?

What is the issue price of the bond?

Q2) Russel's PCI issues a $400,000 bond on 5/1/20Y2. The bond matures in 10 years, has a stated rate of 6%, and pays interest annually. Alternatively, you could invest in a similar risk investment and earn a 4% return.

Will this bond be sold at a discount or a premium?

What is the issue price of the bond?

Reference no: EM133042179

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