Professor Snape invested in an outstanding bond with a 4% annual coupon and a remaining maturity of 10 years. The bond has a par value of $1,000 and the market interest rate is currently 8%. How much did Professor Snape pay for the bond?

Professor Snape invested in an outstanding bond with a 4% annual coupon and a remaining maturity of 10 years. The bond has a par value of $1,000 and the market interest rate is currently 8%. How much did Professor Snape pay for the bond?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter2: The Domestic And International Financial Marketplace

Section: Chapter Questions

Problem 5P

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Question

Professor Snape invested in an outstanding bond with a 4% annual coupon
and a remaining maturity of 10 years. The bond has a par value of $1,000,
and the market interest rate is currently 8% . How much did Professor
Snape pay for the bond?

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