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You are interested in a bond that has a face value of $1,000 and matures in 20 years. During the first five years, no coupons
You are interested in a bond that has a face value of $1,000 and matures in 20 years. During the first five years, no coupons will be paid. Over the subsequent 10 years, coupons will be paid semi-annually at the end of each period, with a coupon rate of 4% per year compounded semiannually. During the last five years, coupons will be paid semi-annually at the end of each period, with a coupon rate will be 6% per year compounded semi-annually. Calculate the current price of the bond, if the yield to maturity remains at 5% per year compounded semi-annually throughout the entire 20 -year period. Show your calculation
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