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In November 2017, Treasury 3 7/8s of 2037 offered a semiannually compounded yield to maturity of...

In November 2017, Treasury 3 7/8s of 2037 offered a semiannually compounded yield to maturity of 2.84%. Recognizing that coupons are paid semiannually, calculate the bond's price. Assume face value is $1,000. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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Answer #1

Given,

Yield to maturity = 2.84%

Par value or face value = $ 1000

Solution :-

Term = 2037 - 2017 - 20 years Semi-annual periods (n) = 20 years x2 = 40 Coupon rate = 37 – 31 = 3.875 % Semi-annual Coupon d1000 _19.325 0.014२ (1+0.014२)० 1000 19.325 -0.014२ .014२) (1.014२)५० + 1000 1257697771359676 19.3250.75769796 -00142 1.25769

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