You purchase a bond with a $100, 000 face value. a. The bond has a semi annual coupon of $3,880 and a maturity of 8 years. Calculate the annual coupon rate b. Assume the yield to maturity is 5.800%. Calculate the present value of the face amount (as if it was a STRIPS). c. Calculate the price of the bond. d. calculate the present value of the coupon payments. e. Calculate the current yield

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 purchase a bond with a $100, 000 face value. a. The bond has a semi
annual coupon of $3,880 and a maturity of 8 years. Calculate the annual
coupon rate b. Assume the yield to maturity is 5.800%. Calculate the
present value of the face amount (as if it was a STRIPS). c. Calculate the
price of the bond. d. calculate the present value of the coupon
payments. e. Calculate the current yield
Transcribed Image Text:You purchase a bond with a $100, 000 face value. a. The bond has a semi annual coupon of $3,880 and a maturity of 8 years. Calculate the annual coupon rate b. Assume the yield to maturity is 5.800%. Calculate the present value of the face amount (as if it was a STRIPS). c. Calculate the price of the bond. d. calculate the present value of the coupon payments. e. Calculate the current yield
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