Answer : $875111.74 | ||||||||
When interest is paid twice a year, then interest rate gets half & period double. | ||||||||
formula = Note value = coupon * PVIFA(yield , n) + Par value * PVIF(yield , n) | ||||||||
Note value = 30000 * PVIFA(5.5%,6) + 1000000 * PVIF(5.5%,6) | ||||||||
Note value = 30000 *4.9955 + 1000000 * 0.7252 | ||||||||
Note value = 875065 or 875111.74 | ||||||||
Assuming that interest rates remain constant, the T-note's price is expected to INCREASE. |
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