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Three bonds walk into a bar... Bond A has a face value of $31,000, a maturity of 8 years, and a (nominal semi- annual) coupon
Three bonds walk into a bar... Bond A has a face value of $31,000, a maturity of 8 years, and a (nominal semi- annual) coupon rate of 2.000%. Bond A and Bond B have the same maturity, but Bond B has a face value of $18,600. Bond A and Bond C have the same coupon rate but Bond C has a maturity of 6 years. The current (nominal semi-annual) yield rate is 1.500% and all three bonds are trading at the same premium/discount. For each part below, 2 marks for the numerical answer, 3 marks for the correct equation. a) How much is the premium/discount of Bond A? b) What is the coupon rate of Bond B? c) What is the face value of Bond C? W
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