P 6-2 (similar to) Question Help Assume that a bond will make payments every six months...

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Answer 1

Answer #1

(a) The bond has 20 six months periods which implies that the maturity of the bond is 20/2 = 10 years

(b) Six-Month Cash Flows = $ 19.09 and Redemption Value (at the end of year 20) = $ 1000

Coupon Rate = 19.09 / 1000 = 0.01909 or 1.909 %

(c) Face Value = Redemption Value = $ 1000

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Answer 2

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