what is the price of a 11-year bond paying an annual coupon rate of 9.2%, but...

what is the price of a 11-year bond paying an annual coupon rate of 9.2%, but paying it semiannually, per face (par) value of 1,000 if the annual market rates for these bonds are 10.3%. answer to nearest cent.

Solutions

Expert Solution

Since the bond is paying semiannual coupon , the number of periods to maturity will be = 11*2 = 22

Semi-annual coupon rate = 9.2%/2 =4.6%

Semiannual market rate = 10.3%/2 = 5.15%

The price of the Bond is calculated as the present value using PV function in excel

Therefore, the price of the Bond is 928.58

jeff jeffy answered 1 year ago

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