. A $3,000 face-value bond matures in three years and pays 8% per year payable semiannually (4% very six months). An investor wants a 10% return per year compounded semiannually. a. How much should the investor pay for the bond?

Exploring Economics
8th Edition
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:Robert L. Sexton
Chapter16: The Markets For Labor, Capital, And Land
Section: Chapter Questions
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Present all computations and clear procedure to receive credit for any answer.
1. A $3,000 face-value bond matures in three years and pays 8% per year payable semiannually (4%
every six months). An investor wants a l0% return per year compounded semiannually.
How much should the investor pay for the bond?
a.
Transcribed Image Text:Present all computations and clear procedure to receive credit for any answer. 1. A $3,000 face-value bond matures in three years and pays 8% per year payable semiannually (4% every six months). An investor wants a l0% return per year compounded semiannually. How much should the investor pay for the bond? a.
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