Answered! A 10-year bond pays annual interest of 8% on a face value ofexist1.000. If similar bonds are currently yielding 10%…

Question 28 A 10year bond pays annual interest of 8% on a face value of$1.000 Isimilar bonds are currenty yielding 10%, what is the market value ofthe bond? Points out 1 one A $877.11 F Fag question B, $910.93 C, $1,100.78 D None of the above When a 20-year bond with 10 years remaining to maturity has a coupon rate higherthan the current market yield on similar bonds the bond can be expected to sell at Question 29 select one A its par value B a discount from its par value C a premium over its par value D its original issue price

28 & 29 please

A 10-year bond pays annual interest of 8% on a face value ofexist1.000. If similar bonds are currently yielding 10%, what is the market value of the bond? Select one A. exist877.11 B. exist910.93 C. exist1, 100.78 D. None of the above When a 20-year bond with 10 years remaining to maturity has a coupon rate higher than the current market yield on similar bonds, the bond can be expected to sell at Select one: A. its par value B. a discount from its par value C. a premium over its par value D. its original issue price

Expert Answer

28. A. $ 877.11

Bond price is calculated by the following formula

n = 10

C = 1000*8% = $ 80

i = 10%

M = 1000

market value = 80*(1/1.1 + 1/1.1² + 1/1.1³ + 1/1.14 + …. ) + 1000/1.1¹⁰ = 877.11

29. C. premium over its par value.

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