1. A callable bond with a 9 percent coupon currently has 20 years left until maturity. Assume the current market interest rate is 7.25 percent and interest payments are paid semiannually.
a. What should the current price of the bond be?
b. Discuss whether this is a discount bond, premium bond, or par bond. Please be sure to explain why.
Answer Current price of the bond = 1183.29 This is... View the full answer