1. What is the price of a 1,000 par value semi-annual bond with 5.0 years to...

1. What is the price of a 1,000 par value semi-annual bond with 5.0 years to maturity and a coupon rate of 4.98% and a yield-to-maturity of 8.62% ?

Expert Solution

Price of Bond = PV of Cash Flows from it.

Period	CF	PVF @4.31%	Disc CF
1	$ 24.90	0.9587	$ 23.87
2	$ 24.90	0.9191	$ 22.88
3	$ 24.90	0.8811	$ 21.94
4	$ 24.90	0.8447	$ 21.03
5	$ 24.90	0.8098	$ 20.16
6	$ 24.90	0.7763	$ 19.33
7	$ 24.90	0.7442	$ 18.53
8	$ 24.90	0.7135	$ 17.77
9	$ 24.90	0.6840	$ 17.03
10	$ 24.90	0.6558	$ 16.33
10	$ 1,000.00	0.6558	$ 655.75
Price of Bond			$ 854.63

jeff jeffy answered 1 day ago

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