YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars: Maturity = 3 years, Coupon rate = 9%, Face value = $1,500, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for the bond similar to the one issued by YOUR BANK is flat and it is 7.500% per annum continuously compounded. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars: Maturity = 3 years, Coupon rate = 9%, Face value = $1,500, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for the bond similar to the one issued by YOUR BANK is flat and it is 7.500% per annum continuously compounded. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
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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YOUR BANK is thinking to issue a regular coupon bond (debenture) with the following particulars: Maturity = 3 years, Coupon rate = 9%, Face value = $1,500, Coupon payments are annual and paid at the end of a year. In the fixed-income securities market, the yield curve for the bond similar to the one issued by YOUR BANK is flat and it is 7.500% per annum continuously compounded. As per you, what should be the issue (offer) price per bond of YOUR BANK in US dollars?
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