A 13-year bond with a face value of 1500 dollars is redeemable at twice par, and...
A 13-year bond with a face value of 1500 dollars is redeemable
at twice par, and pays annual coupons at a rate of 3.3 percent
effective. Find the price to yield an investor 5.9 percent
effective.
Answer = dollars.
Homework Answers
coupon payment = 3.3% * 1500 = 49.50
Amount received at maturity = 1500 * 2 = 3000
Present value of bond = 49.50 * (P/A, 5.9%,13) + 3000 * (P/F, 5.9%,13)
= 49.50 * 8.904626 + 3000 * 0.474627
= 1864.66 ~ 1865 (Nearest Dollar)
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A 13-year bond with a face value of 1500 dollars is redeemable
at twice par, and...
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