You are given two n-year par value 1,000 bonds. Bond X has 14 percent semi-annual coupons and a price of 1,407.70 to yield i, compounded semi-annually. Bond Y has 12 percent semi-annual coupons and a price of 1,271.80 to yield the same rate i, compounded semi-annually. Calculate the price of Bond X to yield i-1%, compounded semi-annually.

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
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You are given two n-year par value 1,000 bonds. Bond X has 14 percent semi-annual coupons and a price of 1,407.70 to yield i,
compounded semi-annually. Bond Y has 12 percent semi-annual coupons and a price of 1,271.80 to yield the same rate i, compounded
semi-annually.
Calculate the price of Bond X to yield i-19%, compounded semi-annually.
Transcribed Image Text:You are given two n-year par value 1,000 bonds. Bond X has 14 percent semi-annual coupons and a price of 1,407.70 to yield i, compounded semi-annually. Bond Y has 12 percent semi-annual coupons and a price of 1,271.80 to yield the same rate i, compounded semi-annually. Calculate the price of Bond X to yield i-19%, compounded semi-annually.
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