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(5) An investor owns a $3,000 par-value 12% bond with semiannual coupons. The bond will mature at par at the end of fourteen years. The
(5) An investor owns a $3,000 par-value 12% bond with semiannual coupons. The bond will mature at par at the end of fourteen years. The investor decides that a ten-year bond would be preferable. Current yield rates are 6% convertible 7 The yearly rate will be equal to the rate produced by the Bond worksheet if we use 365.3463816 inead of 365.25. The interval October 3, 1998-May 30, 2004 includes two February 29 th's so the estimate 55.25 is slightly lower than the average number of days in a year during the period October 3, 1998-May ), 2004 94 Chapter 6 Bonds semiannually. The investor uses the proceeds from the sale of the 12% bond to purchase an 8% bond with semiannual coupons, maturing at par at the end of ten years. Find the face value of the 8% bond
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