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

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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