Professor Snape invested in an outstanding bond with a 4% annual coupon and a remaining maturity of 10 years. The bond has a par value of $1,000 and the market interest rate is currently 8%. How much did Professor Snape pay for the bond?

Professor Snape invested in an outstanding bond with a 4% annual coupon and a remaining maturity of 10 years. The bond has a par value of $1,000 and the market interest rate is currently 8%. How much did Professor Snape pay for the bond?

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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Question

Professor Snape invested in an outstanding bond with a 4% annual coupon
and a remaining maturity of 10 years. The bond has a par value of $1,000,
and the market interest rate is currently 8% . How much did Professor
Snape pay for the bond?

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