A 20-year bond has face value 1000 and is redeemable at par. It pays semi-annual coupons at a 5% annual rate. The bond is purchased at a discount so that its yield to maturity is 7% convertible semi- annually. Calculate the accumulation of discount in the coupon that is paid on the bond's 10th anniversary. Enter your answer as a positive number. Answer=

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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A 20-year bond has face value 1000 and is redeemable at par. It pays semi-annual coupons at a 5%
annual rate. The bond is purchased at a discount so that its yield to maturity is 7% convertible semi-
annually. Calculate the accumulation of discount in the coupon that is paid on the bond's 10th
anniversary. Enter your answer as a positive number.
Answer =
Transcribed Image Text:A 20-year bond has face value 1000 and is redeemable at par. It pays semi-annual coupons at a 5% annual rate. The bond is purchased at a discount so that its yield to maturity is 7% convertible semi- annually. Calculate the accumulation of discount in the coupon that is paid on the bond's 10th anniversary. Enter your answer as a positive number. Answer =
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