Two bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be: Bond A Bond B A. $739.29 $1,174.03 B. $740.61 $1,172.04 C. $739.29 $1,192.04
Two bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be: Bond A Bond B A. $739.29 $1,174.03 B. $740.61 $1,172.04 C. $739.29 $1,192.04
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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- Two bonds have par values of $1,000. Bond A is a 5% quarterly-pay, 15-year
bond priced to yield 8% as an annual rate; the other (Bond B) is a 7.5% quarterly-pay, 20-year bond priced to yield 5.86% as an annual rate. The values of these two bonds would be:
|
|
Bond A |
Bond B |
|
A. |
$739.29 |
$1,174.03 |
|
B. |
$740.61 |
$1,172.04 |
|
C. |
$739.29 |
$1,192.04 |
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