Problem
ABC Corporation's recently issued bonds paying interest semiannually and maturing in 10 years. The face value of each bond is $1000, and 6.8% is the nominal interest rate.
(a) What is the effective interest rate an investor receives?
(b) If a 0.75% fee is deducted by the brokerage firm from the initial $1000, what is the effective annual interest rate paid by ABC Corporation?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.