Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons annually. The effective annual yield is 3 times the coupon rate. The present value of the redemption amount is 5 times the present value of the coupon stream. What is the price of the bond? Problem #2: Answer to the nearest dollar.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons annually. The effective annual
yield is 3 times the coupon rate. The present value of the redemption amount is 5 times the present value of the
coupon stream. What is the price of the bond?
Problem #2:
Answer to the nearest dollar.
Transcribed Image Text:Problem #2: A bond has a face value (and redemption value) of $504,000, and pays coupons annually. The effective annual yield is 3 times the coupon rate. The present value of the redemption amount is 5 times the present value of the coupon stream. What is the price of the bond? Problem #2: Answer to the nearest dollar.
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