A bond with a face value of 1000 and a redemption value of 1080 has an annual coupon rate of 8% payable semiannually. The bond is bought to yield an annual nominal rate of 10% convertible semiannually. At this yield rate, the present value of the redemption value is 601 on the purchase date. Calculate the purchase price of the bond. A. 911 B. 923 C. 956 D. 974 E. 984
A bond with a face value of 1000 and a redemption value of 1080 has an annual coupon rate of 8% payable semiannually. The bond is bought to yield an annual nominal rate of 10% convertible semiannually. At this yield rate, the present value of the redemption value is 601 on the purchase date. Calculate the purchase price of the bond. A. 911 B. 923 C. 956 D. 974 E. 984
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 bond with a face value of 1000 and a redemption value of 1080 has an annual coupon rate of 8% payable semiannually. The bond is bought to yield an annual nominal rate of 10% convertible semiannually. At this yield rate, the
A. 911
B. 923
C. 956
D. 974
E. 984
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