2. (9 points) Ted's Co. offers a six-year semi-annual 8% coupon bond. The market interest rate...
2. (9 points) Ted's Co. offers a six-year semi-annual 8% coupon bond. The market interest rate is 10% annually. What is the current price of this $1,000 face value bond?
Homework Answers
rate positively ..
| We have to use financial calculator to solve this | |||||
| put in calculator- | |||||
| FV | 1000 | ||||
| PMT | 1000*8%/4 | 40 | |||
| I | 10%/2 | 5% | |||
| N | 6*2 | 12 | |||
| Compute PV | ($911.37) | ||||
| ans = | $911.37 | ||||
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2. (9 points) Ted's Co. offers a six-year semi-annual 8% coupon
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