Question
Question 1. A US-Treasury bond with face value of $1,000 pays interest at an annual rate of 5%. Coupons are paid twice per year. If
Question 1. A US-Treasury bond with face value of $1,000 pays interest at an annual rate of 5%. Coupons are paid twice per year.
If this bond has 4 years to mature, what is the price of the bond if current yield to maturity is 4%? Calculate this by finding the value of coupons and principal separately.
If the coupon were instead paid once per year, what would be the price of the bond?
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Multinational Business Finance
Authors: David Eiteman, Arthur Stonehill, Michael Moffett
15th Global Edition
129227008X, 9781292270081
