a) Find the price of a 7-year maturity semi-annual bond with a coupon of 6% (annualized) and
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Question:
a) Find the price of a 7-year maturity semi-annual bond with a coupon of 6% (annualized) and a continuously compounded yield of 5%. Use continuous compounding.
b) Suppose instead that the price of the above bond is $101.00. Use Goal Seek to calculate the bond's yield. Hint: Use Goal Seek to find the yield that sets the difference between your newly calculated price and the specified $101.00 price to zero.
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