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You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $ 1 , 0 0 0 par value
You are called in as a financial analyst to appraise the bonds of Olsen's Clothing Stores. The $ par value bonds have a quoted
annual interest rate of percent, which is paid semiannually. The yield to maturity on the bonds is percent annual interest. There
are years to maturity. Use and for an approximate answer but calculate your final answer using the formula
and financial calculator methods.
a Compute the price of the bonds based on semiannual analysis.
Note: Do not round intermediate calculations. Round your final answer to decimal places.
Bond price
b With years to maturity, if yield to maturity goes down substantially to percent, what will be the new price of the bonds?
Note: Do not round intermediate calculations. Round your final answer to decimal places.
New bond price
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