question archive Ali noticed that the price of the 6 year corporate bond issued by Tamar BHD and explained in part (1

Ali noticed that the price of the 6 year corporate bond issued by Tamar BHD and explained in part (1

Subject:FinancePrice:2.86 Bought7

Ali noticed that the price of the 6 year corporate bond issued by Tamar BHD and explained in part (1.b) is greater its par value.This bond is rated as BBB.Explain the reason why Tamar BhD bond sell at premium.

1(b).The price of a 6 year corporate bond issued by Tamar bhD has a coupon rate of 9%.Assume annual compounding,1000 par value,and interest rate of 8%.

 

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