Question 6 10 pts Value a bond that is $1,000 par, semi-annual coupon payments, 20 years...

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Answer 1

Answer #1

Bond Par Value, (FV) = $1,000

Semi-Annual Coupon Payment, (PMT) = (0.10/2)(1,000) = $50

Yield to Maturity = 0.08/2 = 0.04

Time to Maturity, N = 40 semi-annual periods

Calculating Present Value,

Using TVM Calculation,

PV = [FV = 1,000, PMT = 50, N 40, I = 0.04]

PV = $1,197.93

So,

Bond Price = $1,197.93

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Answer 2

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