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(30pts) As Treasurer of a company, you are about to issue a $10,000 bond maturing in three years with a 4.5% coupon that pavs interest
(30pts) As Treasurer of a company, you are about to issue a $10,000 bond maturing in three years with a 4.5% coupon that pavs interest semi-annually: What is the market price of the bond when the bond is issued if the market requires an annual yield of 3.5% compounded monthly? There is more than one way to solve this problem, but here is a hint: Step 1: figure out the annual yield, compounded semi-annually, that results in a discount factor at month 12 equal to the discount factor given the market's requirement of 3.5% annual yield, compounded monthly. Step 2: use this yield, compounded semi-annually to PV the cash flows
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