Question

A corporate bond matures on October 31, 2035. Its coupon rate is 5.00% and face value is $100. Its yield is 5.90%. How much is its price on June 3, 2020?

Answer 1

Price of Bond = PV of CFs from it.

Price on Oct 31, 2020:

Year	CF	PVF @5.9%	Disc CF
1	$      50.00	0.9443	$   47.21
2	$      50.00	0.8917	$   44.58
3	$      50.00	0.8420	$   42.10
4	$      50.00	0.7951	$   39.75
5	$      50.00	0.7508	$   37.54
6	$      50.00	0.7090	$   35.45
7	$      50.00	0.6695	$   33.47
8	$      50.00	0.6322	$   31.61
9	$      50.00	0.5969	$   29.85
10	$      50.00	0.5637	$   28.18
11	$      50.00	0.5323	$   26.61
12	$      50.00	0.5026	$   25.13
13	$      50.00	0.4746	$   23.73
14	$      50.00	0.4482	$   22.41
15	$      50.00	0.4232	$   21.16
15	$ 1,000.00	0.4232	$ 423.21
Price of Bond on Oct,31 2020			$ 912.02

Price ofn June3:

Period	Particulras	CF	PVF @2.42%	Disc CF
150 Days	Coupon	$      2.05	0.9764	$      2.01
150 Days	Price on Oct 31	$   91.20	0.9764	$   89.05
Price on June3,2020				$   91.05