Should you enter into the contract explain why

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Reference no: EM1399485

Q. You are considering entering into a free contract that guarantees the right to sell a bond for $1000immediately after it pays its annual coupon of $200. Using all available information you establish that based on the intrinsic value of that bond the equilibrium 1year rate of return on the bond is 15%. The bond is presently selling for $1050. Should you enter into the contract Explain why?

According to the efficient market hypothesis Explain how much should the contract you are offered sale for?

Reference no: EM1399485

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