Pfin (book Only)
Pfin (book Only)
6th Edition
ISBN: 9781337117029
Author: Billingsley, Randy; Joehnk, Michael D.; Gitman, Lawrence J.
Publisher: Cengage Learning
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Chapter 13, Problem 3FPE
Summary Introduction

To develop: A mutual fund portfolio of $40,000 and the investment objectives Person X is willing to achieve.

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Bond A pays semi-annual coupons, pays its next coupon in 6 months, matures in 10 years, and has a face value of $1000. Bond B pays annual coupons, pays its next coupon in 1 year, matures in 12 years, and has a face value of $1000. The two bonds have the same YTM. Bond A has a price of $1,119.81 and a coupon rate of 20.80 percent. Bond B has a coupon rate of 19.76 percent. What is the price of bond B? Input instructions: Round your answer to the nearest cent (so 2 decimal places). 59 $
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