Crazy Racoon Fur Trading Company issued a 20-year bond on May 15, 2018 with a 6.00% coupon. The bond pays interest semi-annually (5/15 and 11/15) with no special covenants (puts, calls, etc.). The bond will pay off at par (100.00%) or face value at maturity. You decide to purchase the bond and the trade is going to settle on August 30, 2020. On that date.... a. What is the price of the bond if the yield to maturity is 6.00%? b. What is the price of the bond if the yield to maturity increases to 7.00%? c. What is the price of the bond if the yield to maturity falls to 5.00%? $1,000.00 $981.19 $962.89 CORREC
Crazy Racoon Fur Trading Company issued a 20-year bond on May 15, 2018 with a 6.00% coupon. The bond pays interest semi-annually (5/15 and 11/15) with no special covenants (puts, calls, etc.). The bond will pay off at par (100.00%) or face value at maturity. You decide to purchase the bond and the trade is going to settle on August 30, 2020. On that date.... a. What is the price of the bond if the yield to maturity is 6.00%? b. What is the price of the bond if the yield to maturity increases to 7.00%? c. What is the price of the bond if the yield to maturity falls to 5.00%? $1,000.00 $981.19 $962.89 CORREC
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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