A Bond Has a Maturity Value of $50,000 Payable in 4

question 45

Essay

A bond has a maturity value of $50,000 payable in 4 years. These bonds have a 7% coupon rate payable semi-annually, and the market yield was 4% when the bonds were purchased.
Required:
a. Is this a discount bond or a premium bond?
b. Calculate the amount required to purchase this bond at the beginning of the 4-year period.

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