A 8-year Oman government bond with a face value ofOMR1,000 pays a coupon of 8% (4% of face value everysix months). The reported yield to maturity is 10% (asix-month discount rate of 5%). What is the presentvalue of the bond?

Bonds are valued by the present value of all future cash flows. Future cash flows include periodic…

Answered: A 8-year Oman government bond with a…

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

Section: Chapter Questions

Problem 1PS

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A 8-year Oman government bond with a face value of OMR1,000 pays a coupon of 8% (4% of face value every six months). The reported yield to maturity is 10% (a six-month discount rate of 5%). What is the present value of the bond?