What is the fair price for the bond? today

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1. Consider a Federal Government coupon bond with a? $1,000 face value and a coupon rate of? 1%. If the bond matures in 25? years, pays semi-annual coupons, and the yield to maturity is? 5%, then what will the bond sell? for?

2. The bonds of Vandalay Inc. pay annual coupons at the rate of? 7%. They mature in 15 years with a face value of? $1,000. What is their price if their yield is? 6%?

3. Assume that Microsoft bonds have just left the printer and have a stated coupon of? $100 (a coupon rate of? 10%) and a yield-to-maturity of? 15%. The bonds mature in three years and the next coupon is due in one year. What is the fair price for the bond? today?

4. What is the yield on an? "old masters" painting of Elvis Presley? (acrylic on? velvet) that sells for $ 1,570,000 today and is expected to be sold at a? Sotheby's auction in 2 years for$ 1,900,000?

Reference no: EM132436118

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