A 30-year bond has a 9% coupon paid semi-annually and a bond yield of 12%. What...
A 30-year bond has a 9% coupon paid semi-annually and a bond yield of 12%. What is the price of the bond?
A. $793.53
B. $1,244.33
C. $1,308.21
D. $1,309.57
E. $757.58
F. $758.34
Homework Answers
We will use the BA 2 plus financial calculator to find the current price of the bond. Assuming the par/ future value of the bond is $1000. Please make the following strokes on your calculator-
2ND FV
1000 FV
45 PMT (1000 X 9%/2)
60 N (30X2)
6 I/Y (12/2)
CPT PV
PV = $757.58
The price of the bond is $757.58 (Option E)
Do let me know in the comment section in case of any doubt.
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