You are asked to put a value on a bond which promises eight annual coupon payments of £5 and will repay its face value of £100 at the end of eight years. You observe that other similar bonds have yields to maturity of 9 per cent. How much is this bond worth?
You are asked to put a value on a bond which promises eight annual coupon payments of £5 and will repay its face value of £100 at the end of eight years. You observe that other similar bonds have yields to maturity of 9 per cent. How much is this bond worth?
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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- You are asked to put a
value on a bond which promises eight annual coupon payments of £5 and will repay its face value of £100 at the end of eight years. You observe that other similar bonds have yields to maturity of 9 per cent. How much is this bond worth?
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