A coupon bond that pays interest annually has a par value of $1000, matures in 11...

Question

Question

Answer 1

Answer #1

price of coupon = Coupon payment per period * [1-(1+i)^-n]/i + par value/(1+i)^n

i = interest rate per period

n = number of periods

=>

Price = 70 * [1-(1+3%)^-11]/3% + 1000/(1+3%)^11

= 1370.11

Answer 2

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