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Given the following bond quote: Maturity Date:8/15/2039 Coupon Rate: 4%, semi-annual payments Bid Price: 158% of...

Given the following bond quote:

Maturity Date:8/15/2039

Coupon Rate: 4%, semi-annual payments

Bid Price: 158% of par

Ask Price: 158.25% of par

Change: 0.4688%

Part A: Calculate the price an investor would pay to acquire $85,000 of par value in this bond.

Part B: Calculate the price an investor would receive for selling $60,000 of par value in this bond

Solutions

Expert Solution

Part A

Price to be paid= Par value*Ask rate

=85000*158.25%

= 134,512.5

Part B

Price investor receive = par value*Bid Rate

=60000*158%

=94,800

jeff jeffy answered 2 years ago
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