Question
SSS bonds have a 12-years maturity, a $1,000 par value, and a 6.75% coupon paid quarterly, and those bonds sell at their par value. KKK
SSS bonds have a 12-years maturity, a $1,000 par value, and a 6.75% coupon paid quarterly, and those bonds sell at their par value.
KKK bonds have the same risk, maturity, and par value as SSS bonds, but the KKK bonds pay a 5.75% semi-annual coupon.
a/ What is the current price of the KKK bonds?
b/ What is the price of the KKK bonds 5 years from now?
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Financial Markets and Institutions
Authors: Anthony Saunders, Marcia Cornett
6th edition
9780077641849, 77861663, 77641841, 978-0077861667
