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A 14 year bond with an annual coupon rate of 1.75% and a face value of $4500 is bought at a (effective annual) yield of
A 14 year bond with an annual coupon rate of 1.75% and a face value of $4500 is bought at a (effective annual) yield of 1.02%.
. a) What is the purchase price of the bond?
b) How much is the premium/discount?
c) How much of coupon payment 3 is interest? 1
d) How much of coupon payment 3 is amortization of discount/premium?
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