Question

assuming you want to purchase a 5 year bond that had a face value of $10000...

assuming you want to purchase a 5 year bond that had a face value of $10000 that pays 12% intrest. How much are you willing to pay for this bond assuming marker rate is 12%

A 5,674
B 1,200
C 10,000
D 29,805
0 0
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Answer #1

Here,

Coupon Rate = 12%

Yield to Maturity = 12%

When, YTM = Coupon Rate, Bond will be priced at par value,

Par Value = $10,000

Bond Price = Par Value,

So,

Bond Price = $10,000

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