A government bond with a face value of $1,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays semi-annual coupon payments of $45, the coupon rate is 9% pa paid twice yearly and rates in the marketplace are 8% pa compounded semi-annually. What is the value of the bond today? a. $1,052.82 b. $1,033.66 c. $1,000.00 d. $817.78 e. $1,058.26
A government bond with a face value of $1,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays semi-annual coupon payments of $45, the coupon rate is 9% pa paid twice yearly and rates in the marketplace are 8% pa compounded semi-annually. What is the value of the bond today? a. $1,052.82 b. $1,033.66 c. $1,000.00 d. $817.78 e. $1,058.26
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 11P
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A government bond with a face value of $1,000 was issued eight years ago and there are seven years remaining until maturity. The bond pays semi-annual coupon payments of $45, the coupon rate is 9% pa paid twice yearly and rates in the marketplace are 8% pa compounded semi-annually. What is the
a. $1,052.82
b. $1,033.66
c. $1,000.00
d. $817.78
e. $1,058.26
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