What is the price of a 1000 par value bond with a coupon rate of 7.5...

What is the price of a 1000 par value bond with a coupon rate of 7.5 annual payments that matures 11 years assuming the bonds ytm is 3.84

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Expert Solution

Bond price is equal to the present value of all future coupon payments and the principal amount

= 1000*7.5%*PVAF(3.84%, 11 years) + 1000*PVF(3.84%, 11 years)

= 75*8.8366 +1000*0.6607

= $1,323.45

jeff jeffy answered 2 years ago

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