Question
Bill bought a $34,000 face value bond one month before it was due to pay out a semi-annual coupon. The coupon rate was 9% and
Bill bought a $34,000 face value bond one month before it was due to pay out a semi-annual coupon. The coupon rate was 9% and there were 52 coupons left to maturity. The YTM was 8% per annum compounded semi-annually when Bill purchased the bond. Bill sold the bond exactly 19 years and two months later. the YTM at the time of sale was 9% per year compounded twice a year. During the period that Bill held the bond, he reinvested all coupons received in a bank account receiving interest at an EAR of 6.147%.
What was the purchase price of the bond?
This question is on my exam prep and my study group is getting different answers. Any help would be appreciated!
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