Question

In: Finance

A. Bond A has the following features: Face value = $1,000, Coupon Rate = 3%, ...

A.

Bond A has the following features:

Face value = $1,000,

Coupon Rate = 3%,

Maturity = 6 years, Yearly coupons

The market interest rate is 4.34%

What is today’s price of bond A?

B.

Bond A has the following features:

Face value = $1,000,

Coupon Rate = 7%,

Maturity = 10 years, Yearly coupons

The market interest rate is 4.94%

If interest rates remain at 4.94%, what will the price of bond A be in year 1?

C.

How much would you pay today for a bond that has a face value of $1,000, and annual coupon of $83 and a maturity of 5 years? (=what is the price of the bond?)

The annual interest rate is 6.27%?

Expert Solution

Formulae

jeff jeffy answered 1 year ago

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