Introduction to Finance

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Question description

Judy Johnson is choosing between investing in two Treasury securities that mature in five years and have par values of $1,000. a. What is its price if investors’ required rate of return is 6.09 percent on similar bonds? Treasury notes pay interest semiannually. b. Erron Corporation wants to issue five-year notes but investors require a credit risk spread of 3 percentage points. What is the anticipated coupon rate on the Erron notes?

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