Consider a bond with a coupon rate of 6% and a face value of $1,000. Coupons are paid semi-annually. Suppose there are 52 days to the next coupon payment date, beyond which there are 3 years left to maturity (so that there are in total 1+3*2 number of COupon pavments left+) The b ond is CLurrently

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
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Consider a bond with a coupon rate of 6%
and a face value of $1,000. Coupons are paid
semi-annually. Suppose there are 52 days to
the next coupon payment date, beyond
which there are 3 years left to maturity (so
that there are in total 1+3*2 number of
coupon payments left). The bond is currently
trading at a YTM of 4%. If you were to buy this
bond today, what is the price you would have
to pay?
Assume a 30/360 day-count convention.
Round your answer to the nearest cent (2
decimal places).
Transcribed Image Text:Consider a bond with a coupon rate of 6% and a face value of $1,000. Coupons are paid semi-annually. Suppose there are 52 days to the next coupon payment date, beyond which there are 3 years left to maturity (so that there are in total 1+3*2 number of coupon payments left). The bond is currently trading at a YTM of 4%. If you were to buy this bond today, what is the price you would have to pay? Assume a 30/360 day-count convention. Round your answer to the nearest cent (2 decimal places).
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