Bonds often pay a coupon twice a year. For the valuation of bonds that make semiannual...

Assume that a $1,000,000 par value, semiannual coupon U.S. Treasury note with two years to maturity has a coupon rate of 3%. The yield to maturity (YTM) of the bond is 11.00%. Using this information and ignoring the other costs involved, calculate the value of the Treasury note:

$859,794.00

$730,824.90

$541,670.22

$1,031,752.80

Based on your calculations and understanding of semiannual coupon bonds, complete the following statements: • Assuming that interest rates remain constant, the T-note’s price is expected to_______ .

• The T-note described is selling at a_________.

• When valuing a semiannual coupon bond, the time period variable (N) used to calculate the price of a bond reflects the number of_________ periods remaining in the bond’s life.

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jeff jeffy answered 2 days ago

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