A Bond of 1,000 Face value with a coupon of 7 per cent is redeemable after 5 years at a premium of 5 per cent. The required rate of return is 8%. The current market price of the bond is 940. Whether investment at current market price of the bond advisable? The present value of 1 at 8% discounting rate are 0.926, 0.857, 0.794, 0.735 and 0.681.
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