A bond offers a coupon rate of 14%, paid annually, and has a maturity of 20 years. The current market yield is 1 4%. Face value is $1,000. If market conditions remain unchanged, what should the price of the bond be in 1 year? Assume the market yield remains unchanged. Enter your answer in terms of dollars and cents, rounded to 2 decimals, and without the dollar sign. That means, for example, that if your answer is $127.5678, you must enter 127.57
A bond offers a coupon rate of 14%, paid annually, and has a maturity of 20 years. The current market yield is 1 4%. Face value is $1,000. If market conditions remain unchanged, what should the price of the bond be in 1 year? Assume the market yield remains unchanged. Enter your answer in terms of dollars and cents, rounded to 2 decimals, and without the dollar sign. That means, for example, that if your answer is $127.5678, you must enter 127.57
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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Transcribed Image Text:A bond offers a coupon rate of 14%, paid annually, and
has a maturity of 20 years. The current market yield is 1
4%. Face value is $1,000. If market conditions remain
unchanged, what should the price of the bond be in 1
year? Assume the market yield remains unchanged.
Enter your answer in terms of dollars and cents,
rounded to 2 decimals, and without the dollar sign. That
means, for example, that if your answer is $127.5678,
you must enter 127.57
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