A 10-year government bond has face value of OR 200 and a coupon rate of 6% paid semiannually. Assume that the interest rate is equal to 8% per year. What is the bond’s price? What is the reason for the difference in price on an annual and semiannually basis? Discuss the role of financial managers.

Q: You are considering a 10-year, $1,000 par value bond. Its couponrate is 8%, and interest is paid…

A: The computation of nominal rate: Hence, the nominal rate is 7%.

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Q: A U.S. Government T-bond matures in 12 years and has a face value of $100. The bond has a coupon…

A:

Q: Which security has a higher effective annual interest rate?a. A 3-month T-bill selling at $97,645…

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Q: The U.S. Government has a 20-year bond that matures 20 years from now and has a face value of…

A: "Since you asked multiple questions, we will answer the first question for you as per guidelines.…

Q: A twenty-year government bond with a face value of 120$ makes annual coupon payments of 6% and…

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Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.