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F. Naz
F. Naz, Chartered Accountant
Category: Homework
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Experience:  Experience with chartered accountancy
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Your broker offers to sell a $1,200 AAA-rated bond with a coupon

Resolved Question:

Your broker offers to sell a $1,200 AAA-rated bond with a coupon rate of 10% and a maturity of eight years. Given that the interest rate on comparable debt is 8%, is your broker fairly pricing the bond?
Submitted: 4 years ago.
Category: Homework
Expert:  F. Naz replied 4 years ago.

Muhammad Jawaad Ahmed :

Fair price of bond should be 100*5.7466+1000*.5403 = 1115, therefore it higher by $85

Customer:

Thank you!

Muhammad Jawaad Ahmed :

Please do not hesitate to ask further and if you are satisfied do not forget to click on ACCEPT button so I get paid for my efforts, thanks.

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