Question
1. A bond has a face value of $1000 with a time to maturity 10 years from now. The yield to maturity of the bond
1.
A bond has a face value of $1000 with a time to maturity 10 years from now. The yield to
maturity of the bond now is 10%.
a)
What is the price of the bond today, if it pays no coupons?
b)
What is the price of the bond if it pays annual coupons of 10%?
c)
What is the price today if pays 8% coupon rate semi-annually?
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Fundamentals of Investments Valuation and Management
Authors: Bradford D. Jordan, Thomas W. Miller
5th edition
978-007728329, 9780073382357, 0077283295, 73382353, 978-0077283292
