A five year $10, 000 bond with a 10% coupon rate costs $ 10,000 and pays its holder $500 every six months for five years, with a final additional payment of $10, 000 made at the end of those ten payments Find its present value if the interest rate is: (a) 6% (b) 10% (c) 12%
A five year $10, 000 bond with a 10% coupon rate costs $ 10,000 and pays its holder $500 every six months for five years, with a final additional payment of $10, 000 made at the end of those ten payments Find its present value if the interest rate is: (a) 6% (b) 10% (c) 12%
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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Question
A five year $10, 000 bond with a 10% coupon rate costs $ 10,000 and pays its holder $500 every six months for five years, with a final additional payment of $10, 000 made at the end of those ten payments Find its
(a) 6%
(b) 10%
(c) 12%
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