A $1,000 par-value bond with 5 years of maturity pays a 5% coupon rate, paid annually....

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

2. 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 5%?

3. 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 7%?

4. 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 3%?

Solutions

Expert Solution

1) value of bond = $1,000

2) value of bond = $1,000

3) value of bond = $916.833946776

4) value of bond = $1,092.22184555

jeff jeffy answered 1 year ago

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