1) (Bond valuation) National Steel 17-year, $1,000 par value bonds pay 9 percent interest annually. The market price of the bonds is $1,100, and the markets required yield to maturity on a comparable-risk bond is 6 percent. a. Compute the bond’s expected rate of return. b. Determine the value of the bond to you, given your required rate of return. c. Should you purchase the bond?
2) The Saleemi Corporation's $1,000 bonds pay 11% interest annually and have 11 years until maturity. You can purchase the bond for $1,115. A. what is the yield to maturity on the bond? The yield to maturity on the Saleemi bond is what __%. (Round to two decimal places) B. Should you purchase the bond if the yield to maturity on a comparable-risk bond is 11%?