The florida investment fund buys 90 percent of the gator, Ask an Expert

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The Florida Investment Fund buys 90 percent of the Gator Corporation through a broker. The bonds pay 8 percent annual interest. The yield to maturity (market rate of interest) is 10 percent. The bonds the bonds have a 25-year maturity.

Using an assumption of semiannual interest payments:

a. Compute the price of a bond (refer to "semiannual Interest and Bond Prices" in Chapter 10 for review if necessary).

b. Compute the total value of the 90 bonds.

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