Chapter 6 QP 8 & 35.docx - Valeria Valenzuela Business 106...

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Valeria Valenzuela Business 106 23 February 2020 Chapter 6 Homework QP 8 – Bond Pricing. A 6-year Circular File bond with face value $1,000 pays interest once a year of $80 and sells for $950.
c. If Circular wants to issue a new 6-year bond at face value, what coupon rate must the bond
QP 35 – Credit Risk. A bond’s credit rating provides a guide to its risk. Suppose that long-term bonds rated Aa currently offer yields to maturity of 7.5%. A-rated bonds sell at yields of 7.8%.

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