Question
Trico Bonds have a coupon rate of 8% at a par value of $1000 and will mature in 20 years. a. If you require a
Trico Bonds have a coupon rate of 8% at a par value of $1000 and will mature in 20 years.
a. If you require a return of 7%, what price will you be willing to pay for the bond?
b. What happens if you pay more/less?
c. What is the duration of this bond if the current price is $1212, and what does it mean?
d. What is the bond fair price if coupons are paid semi-annual rather than annual?
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Management Science The Art Of Modeling With Spreadsheets
Authors: Stephen G. Powell, Kenneth R. Baker
3rd Edition
0470530677, 978-0470530672
