Question
ABC Ltd issues a bond with 10.12% coupon rate and semi-annual coupon. It is known that the yield to maturity is 9.22%, and the face
ABC Ltd issues a bond with 10.12% coupon rate and semi-annual coupon. It is known that the yield to maturity is 9.22%, and the face value for the bond is at $1000. However, as a potential investor, you do not know the maturity for the bond.
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a) Briefly explain whether the bond is currently trading at a discount, at par, or at a premium.
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b) If the time to maturity is 10 years, what is the bond price?
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Personal Finance
Authors: Jack R Kapoor, Glencoe McGraw Hill, Les R Dlabay, Robert J Hughes
1st Edition
0078698006, 9780078698002
