Question
: Three bonds walk into a bar...Bond A has a face value of $31000, a maturity of 10 years. and a (nominal semi-annual) coupon rate
: Three bonds walk into a bar...Bond A has a face value of $31000, a maturity of 10 years. and a (nominal semi-annual) coupon rate of 2.50%. Bond A and Bond B have the same maturity, but Bond B has a face value of $34100.0. 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 4.00% 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?
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