Renfro rentals has issued bonds, Financial Accounting

a) The actual risk-free rate is 3%, and inflation is usual to be 2% for the next 2 years. A 2-year Treasury security yields 6.7%. What is the maturity risk premium for the 2-year security?

b) Renfro Rentals has issued bonds that have a 8% coupon rate, payable semi-yearly. The bonds mature in 10 years, have a face value of $1,000, and a yield to maturity of 8%. What is the price of the bonds?

 

Posted Date: 3/28/2013 3:48:12 AM | Location : United States







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