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Lucia just bought one coupon bond with a principal amount of $1,000 with an annual coupon...

Lucia just bought one coupon bond with a principal amount of $1,000 with an annual coupon rate of 7.1%. The bond pays annual interest payment and will mature in three years. The yield to maturity of this coupon bond is 2.31%. How much did Lucia pay to buy this 3-year coupon bond?

Please round your answer to the second decimal. E.g. 1234.56

Solutions

Expert Solution

rate positively ..

We have to use financial calculator to solve this
put in calculator
FV 1,000
PMT 1,000*7.1% 71
I 2.31%
N 3
compute PV ($1,137.31)
Price = $1,137.31
ans = $1,137.31

jeff jeffy answered 2 years ago
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