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Consider the situation in which Jackson wants to earn a return of 3% (YTM), but the bond being considered for purchase offers a coupon rate
Consider the situation in which Jackson wants to earn a return of 3% (YTM), but the bond being considered for purchase offers a coupon rate of 3% with a face value of $5,000. Assume that the bond pays semiannual interest payments and has three years to maturity. What is the price of this bond?
| A. | $1,000 | |
| B. | $5,000 | |
| C. | $3,000 | |
| D. | $7,000 |
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