(Bond
valuation?)
You own a
1515?-year,
?$1 comma 0001,000
par value bond paying
6.56.5
percent interest annually. The market price of the bond is
?$850850?,
and your required rate of return is
1010
percent.
a. Compute the? bond's expected rate ofreturn.
b. Determine the value of the bond to? you,given your required rate of return.
c. Should you sell the bond or continue to own?it?
