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EXPLAIN WHY PLZ What is the current market price (the intrinsic value) of the bond D?. The answer should be calculated to two decimal places.
EXPLAIN WHY PLZ
What is the current market price (the intrinsic value) of the bond D?.
The answer should be calculated to two decimal places.
You can use financial calculator, or Excel financial function PV.
| The Current Market Annual Interest Rate (r) | Number of Years to Maturity (n) | Annual Coupon Rate, (paid annually) (k) | Par Value | Current Market Price of the Bond (the Bond Intrinsic Value) | |
| Bond A | 7% | 20 | 13% | $1,000 | |
| Bond B | 6.5% | 12 | 5.7% | $1,000 | |
| Bond C | 4.3% | 9 | 8.3% | $1,000 | ? |
| Bond D | 15.8% | 30 | 11.5% | $5,000 |
|
Question options:
a) 926.73
b)1,293.39
c)976.92
d)1,164.82
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