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
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 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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