An investor purchases a 30-year bond with a face amount of 1000 and annual coupon rate of 8% paid semi-annually. The bond is callable at its face value any time following the coupon payment occurring at the end of the 15th year. The bond is bought at a premium based on an annual effective yield rate of 7%. Calculate the purchase price of the bond. 1067 1104 1132 1141 1154

An investor purchases a 30-year bond with a face amount of 1000 and annual coupon rate of 8% paid semi-annually. The bond is callable at its face value any time following the coupon payment occurring at the end of the 15th year. The bond is bought at a premium based on an annual effective yield rate of 7%. Calculate the purchase price of the bond. 1067 1104 1132 1141 1154

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...

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