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A bond that pays interest semiannually has a coupon rate of 5.20 percent and a current yield of 5.53 percent. The par value is $1,000.
A bond that pays interest semiannually has a coupon rate of 5.20 percent and a current yield of 5.53 percent. The par value is $1,000. What is the bond's price?
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$924.65
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$940.33
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$970.16
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$1,018.69
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$1,063.46
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Face Value = $1,000 Current Yield = 5.53%
Annual Coupon Rate = 5.20% Annual Coupon = 5.2% * $1,000 Annual Coupon = $52
Current Yield = Annual Coupon / Current Price 5.53% = $52 / Current Price
52/5.53 =940.3255 Current Price = $940.3255
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