Question

In: Finance

If a semi-annual bond has par-value is $100, 5% coupon and 8years of remaining maturity,...

If a semi-annual bond has par-value is $100, 5% coupon and 8 years of remaining maturity, what would be the market price if yield is 6%

100, 106.78, 93.71, or none of the above

Solutions

Expert Solution

We will uss the BA 2 Plus financial calculator to find the market price. Please press the following keys on your calculator-

2ND FV

16 N (8X2)

100 FV

3 I/Y (6/2)

2.5 PMT (100X5%/2)

CPT PV

PV = -93.71 (Negative as it is an outflow)

Answer = $93.71

 

jeff jeffy answered 2 years ago
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