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Question
A 12-year annual payment corporate bond has a market price of $925. It pays annual interest of $60 and its required rate of return is 7%. By how much is the bond mispriced?
A. $0.00
B. Overpriced by $7.29
C. Underpriced by $7.29
D. Overpriced by $4.43
E. Underpriced by $4.43
Answer
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