Question
Consider a bond paying a coupon rate of 8.00% per year semiannually when the market interest rate is only 3.2% per half-year. The bond has
Consider a bond paying a coupon rate of 8.00% per year semiannually when the market interest rate is only 3.2% per half-year. The bond has five years until maturity.
a. Find the bond's price today and six months from now after the next coupon is paid. (Do not round intermediate calculations. Round your answers to 2 decimal places
Current Price:
Prices after 6 months:
b. What is the total rate of return on the bond? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Total rate of Return:
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Principles of managerial finance
Authors: Lawrence J Gitman, Chad J Zutter
12th edition
9780321524133, 132479540, 321524136, 978-0132479547
