Question
In: Finance
Suppose that you purchased a B- rated $5,000 annual coupon bond with an 16.5% coupon rate...
Suppose that you purchased a B- rated $5,000 annual coupon bond with an 16.5% coupon rate and a 9-year maturity. The current rate on 9-year US treasuries is 3%. If you purchased it at a 7.021% discount to par value, how much did you pay?
Solutions
Expert Solution
| Par value = $5000 | |||||
| Discount on par value = $5000*7.021% | |||||
| =$351.05 | |||||
| Purchase price = $5000-351.05 | |||||
| =$4648.95 | |||||
| Correct Answer =$4648.95 | |||||
jeff jeffy answered 2 years agoRelated Solutions
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