ABC Corporations recently issued bonds payinginterest

Chapter , Problem 7-40

(choose chapter or problem)

ABC Corporations recently issued bonds payinginterest semiannually and maturing in 10 years. Theface value of each bond is $1000, and 6.8% is thenominal interest rate.(a)What is the effective interest rate an investorreceives?(b)If a 0.75% fee is deducted by the brokeragefirm from the initial$1000, what is the effectiveannual interest rate paid by ABC Corporation?

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