A $10,000, 10-year corporate bond is offered at a premium for $11,250. The bond rate is 4% per year compounded quarterly
Posted: Sun Jul 03, 2022 6:55 am
A $10,000, 10-year corporate bond is offered at a premium for$11,250. The bond rate is 4% per year compounded quarterly. If Alexwishes to earn 3% per year compounded quarterly on the bondinvestment, should he purchase the bond assuming he keeps the bondtill it matures and then redeems it at face value?Explain. Show all work.