You receive a call from your broker to offer you a new bond whose par value is $ 1,000, has a maturity of 14 years and an annual interest rate of 9%. This bond is being sold to you for $ 1,100. The required market return for a comparable bond at risk is 10%. Answer the following questions with this exercise: Question 1 Is the bond selling at par, at a premium, or at a discount? Select one: a. a discount b. with cousin c. at even value Question 2 Based on your answer to the previous question, that price is listed that way (discounted, premium, or even) because: Select one: a. it is selling below par value. b. it is sold below market value. c. it is selling above par value. d. it is sold above the market value. e. it is sold at par value. Question 3 That bond is selling: Select one: a. in the secondary market, because it is being sold to original issue (first time) b. in the primary market, because it is being sold to original issue (first time) c. in the secondary market, since it would be buying from another investor in the market d. in the primary market since it would be buying from another investor in the market e. cannot be determined Question 4 One reason governments and companies agree to issue bonds in public markets are: Select one a. to carry out infrastructure projects that benefit the company or the citizens of the city that administers that government. b. to increase overall cash flow c. to balance the operational budget d. to balance the cash budget in case of illiquidity e. to increase the value of the company or government assets Question 5 Determine the price of the bond (intrinsic value) using the data provided File your answer to two decimal places and it should show the entire procedure ____________ Question 6 Would you buy the bond at the original price your broker sold it for? Explain your answer. ____________