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Consider a bond with an annual coupon rate of 10% that makes semiannual coupon payments for three years and then $100 par value at maturity.
Consider a bond with an annual coupon rate of 10% that makes semiannual coupon payments for three years and then $100 par value at maturity. Assuming 9% yield, what is the future value of this bond after three years? Note that this bond is akin to a portfolio paying an annuity of $10 for the next three years paid semi-annually and a zero-coupon bond paying $100 after three years. Next, assume the bond pays coupons annually rather than semiannually, what will be corresponding future value of the bond
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