Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the interest rate is 8%, and coupon rate is 10%. How much should you pay for this bond (rounded to integer) O $1,080.00 O $1,008.00 O $1,000.00 O $1,076.00

Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the interest rate is 8%, and coupon rate is 10%. How much should you pay for this bond (rounded to integer) O $1,080.00 O $1,008.00 O $1,000.00 O $1,076.00

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

Whittier Inc. offers you a $1,000 bond with 5 years to maturity, annual payments. Assume that the interest rate is 8%, and coupon rate is 10%. How much should you pay for this bond (rounded to integer)?
O $1,080.00
O $1,008.00
O $1,000.00
O $1,076.00

Expert Solution

Step 1

Given:

Particulars
Par value(FV)	1000
Years (NPER)	5
Rate	8%
Coupon rate	10%

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