Suppose that you purchased a Ba rated $5.000 annual coupon bond with an 14.3% coupon rate and a 20-year maturity. The current rate on 20-year US treasuries is 3%. If you purchased it at a 11.749 % premium to par value, how much did you pay?
Suppose that you purchased a Ba rated $5.000 annual coupon bond with an 14.3% coupon rate and a 20-year maturity. The current rate on 20-year US treasuries is 3%. If you purchased it at a 11.749 % premium to par value, how much did you pay?
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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Transcribed Image Text:Suppose that you purchased a Ba rated $5,000 annual coupon bond with an 14.3% coupon rate and a 20-year
maturity. The current rate on 20-year US treasuries is 3%. If you purchased it at a 11.749 % premium to par
value, how much did you pay?
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