A $1,000 par-value bond with 5 years of maturity pays a 7% coupon rate, paid annually. What is the value of the bond if your required rate of return is 7%?

A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid semi-annually. What is the value of the bond if your required rate of return is 8%?

Expert Solution

1. Whenever coupon rate of bond is equal to the required return of the bond ,the par value of bond will be always equal to the price of the bond.

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2.

Calculations-

jeff jeffy answered 3 years ago

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A $1,000 par-value bond with 5 years of maturity pays a 7% coupon rate, paid annually. What is the value of the bond if your required rate of return is 7%?

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