Question
Problem 7-5 Bond valuation An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 11% annual
Problem 7-5 Bond valuation
An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 11% annual coupon. Bond L matures in 14 years, while Bond S matures in 1 year.
Assume that only one more interest payment is to be made on Bond S at its maturity and that 14 more payments are to be made on Bond L.
What will the value of the Bond L be if the going interest rate is 5%? Round your answer to the nearest cent.
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Finance For Non Financial Managers
Authors: Gene Siciliano
1st Edition
0071413774, 978-0071413770
