A bond that matures in 12 years has a $ 1000 par value. The annual coupon interest rate is 12 percent and the market's required yield to maturity on a comparable-risk bond is 16 percent. What would be the value of this bond if it paid interest annually? What would be the value of this bond if it paid interest semiannually?

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A:

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A: for your convenience, i will provide a financial calculator solution here. THANK YOU

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A: “Hi There, thanks for posting the question. But as per Q&A guidelines, we must answer the first…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.