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John Smith's broker has shown him two bonds. Each has a maturity of 4 years, a par value of $1,000, and a yield to maturity of 13%. Bond A has a coupon interest rate of 7% paid annually. Bond B has a coupon interest rate of 15% paid annually. John has $21,000 to invest.

The selling price for Bond A is $________

The selling price for Bond B is $________

The number of Bond A issues John could purchase is ______ issues.

The number of Bond B issues John could purchase is ______ issues.

If John invests in Bond A, the value of the principal payment plus the value of his reinvestment account per bond is __________?

If John invests in Bond B, the value of the principal payment plus the value of his reinvestment account per bond is __________?

Financial Management, Finance

  • Category:- Financial Management
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