A bond with annual coupon rate of 5.10% and price of $1,090 just yesterday paid a coupon.
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Question:
A bond with annual coupon rate of 5.10% and price of $1,090 just yesterday paid a coupon.
A total of 23 coupons remain to be paid.
Suppose you buy the bond at today's price, hold it and receive 8 coupons, and then sell the bond.
If at the time you sell the bond its YTM has decreased a total of 50 basis points, find the selling price of the bond.
(FYI; 0.01=1%=100 basis points; use semiannual compounding)
***Please show detailed steps on how to solve this question. Thank you! :)
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