A bond that has a face value of $1,000 and coupon rate of 3.80% payable semi-annually was redeemable on July 1, 2021. Calculate the purchase price of the bond on February 10, 2015 when the yield was 4.05% compounded semi-annually.

A bond that has a face value of $1,000 and coupon rate of 3.80% payable semi-annually was redeemable on July 1, 2021. Calculate the purchase price of the bond on February 10, 2015 when the yield was 4.05% compounded semi-annually.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 14P: Current Yield with Semiannual Payments A bond that matures in 7 years sells for $1,020. The bond has...

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Question

A bond that has a face value of $1,000 and coupon rate of 3.80% payable semi-annually
was redeemable on July 1, 2021. Calculate the purchase price of the bond on February
10, 2015 when the yield was 4.05% compounded semi-annually.
Round to the nearest cent

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