Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7.9 % (annual payments). The yield to maturity on this bond when it was issued was 5.9 %. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?

Suppose that General Motors Acceptance Corporation issued a bond with 10 years until maturity, a face value of $1000, and a coupon rate of 7.9 % (annual payments). The yield to maturity on this bond when it was issued was 5.9 %. Assuming the yield to maturity remains constant, what is the price of the bond immediately before it makes its first coupon payment?

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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