You have the opportunity to purchase a 25-year, $1,000 par value bond that has an annual coupon rate of 11%. If you require a YTM of 7.7%, how much is the bond worthto you?The price of the bond is $(Round to the nearest cent.)

Given information, Number of periods (n) = 25 yearsPar value (FV) = $1,000Annual coupon rate (C) =…

Answered: You have the opportunity to purchase a…

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 have the opportunity to purchase a 25-year, $1,000 par value bond that has an annual coupon rate of 11%. If you require a YTM of 7.7%, how much is the bond worth to you? The price of the bond is $ (Round to the nearest cent.)