The current bear market in stocks is driving people to invest in bonds. A few months ago, after reading a reddit post, your friend decided to buy a bond that matures on February 1st, 2047. This bond has an annual coupon rate of 4.395% paid out semi- annually. Today (December 21st, 2022), your friend decides to sell the bond. Yields are currently 4.170%, and there are exactly 42 days until the next coupon is paid and a total of 184 days between coupons. Your friend wants to know at what price to sell the bond, in other words, what is the clean price of this bond? Assume actual/actual convention, a face value of $100, and all rates are annualized. (Round your final answer to four decimal places)
The current bear market in stocks is driving people to invest in bonds. A few months ago, after reading a reddit post, your friend decided to buy a bond that matures on February 1st, 2047. This bond has an annual coupon rate of 4.395% paid out semi- annually. Today (December 21st, 2022), your friend decides to sell the bond. Yields are currently 4.170%, and there are exactly 42 days until the next coupon is paid and a total of 184 days between coupons. Your friend wants to know at what price to sell the bond, in other words, what is the clean price of this bond? Assume actual/actual convention, a face value of $100, and all rates are annualized. (Round your final answer to four decimal places)
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:The current bear market in stocks is driving people to invest in bonds. A few months
ago, after reading a reddit post, your friend decided to buy a bond that matures on
February 1st, 2047. This bond has an annual coupon rate of 4.395% paid out semi-
annually. Today (December 21st, 2022), your friend decides to sell the bond. Yields
are currently 4.170%, and there are exactly 42 days until the next coupon is paid and
a total of 184 days between coupons. Your friend wants to know at what price to sell
the bond, in other words, what is the clean price of this bond? Assume actual/actual
convention, a face value of $100, and all rates are annualized. (Round your final
answer to four decimal places)
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