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An investor is considering purchasing a $100 par-value bind with a 6.0% semi-annual coupon and a 10-year maturity. An investor is considering purchasing a $100
An investor is considering purchasing a $100 par-value bind with a 6.0% semi-annual coupon and a 10-year maturity.
An investor is considering purchasing a $100 par-value bond with a 6.0% semi-annual coupon and a 10 -year maturity. The ask price of this bond is 100-16. The investor would purchase the bond 3 months into the 182 -day semi-annual coupon period. Please assume a month has 30 days. Detail the following. Be sure to show all work: a. The clean (flat) ask price of the bond in dollars: b. The bond has a 4 tick bid/ask spread. What is the bid price in dollars? c. The dirty (invoice) price of the bond (please include accrued interest): d. The semiannual coupon amount (\$) for this bond is: e. Using the clean (ask) price of the bond and the Excel (RATE) function, compute the yield to maturity (\%): f. Using the clean (ask) price of the bond, what is the current yield on the bond Step by Step Solution
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