Question

A bond with a face value of $3,000 has a current yield of 7% and a coupon rate of 8%. What is the bonds price? A. $3,428.57

Where applicable, and if not specifically addressed in the question, assume interest is compounded annually ( i.e. P/Y = 1) , at the end of each year.  The only exception will be for the mortgage problem (#34), which will have payments and interest calculated on a monthly basis, at the end of each month.

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Annual Coupon Face Value*Coupon rate 3000*8% $ 240.00 Price Annual Coupon/Current Yield 240/0.07 $ 3,428.57 Answer A

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